Connect with us

World

Delay is a victory but not for long, analyst says

Published

on

Any remaining political support for former Malaysian Prime Minister Najib Razak could “collapse” once a corruption trial related to the scandal-ridden state fund 1MDB gets underway — despite the ex-leader’s recent attempts to shore up his popularity on social media, an analyst said on Tuesday.

Najib, ousted in an election in May last year, is facing more than 40 charges, including criminal breach of trust, money laundering and abuse of power in relation to 1MDB. The former leader has pleaded not guilty, and the trial for 10 of those charges was supposed to start on Tuesday, but was postponed pending an appeal.

The delay could be seen as a “victory” for Najib, whose recent social media activity — which includes releasing a music video — is widely seen by observers as an attempt to engineer a political comeback, said James Chin, director of the Asia Institute Tasmania at the University of Tasmania. But those efforts may be futile because the trial — when it eventually starts — will remind Malaysians of the scale of 1MDB’s alleged money laundering scandal, Chin added.

No new date has been set for the trial, but Reuters reported that a Malaysian prosecutor said the delay could last one or two weeks.

“Very often, the followers on social media and the likes you get on social media [do] not necessarily mean that you can translate that into broad political support in the real world. And also, I suspect that once the trial gets going, once people find out the amount of money involved and also how the money was misused, I suspect the political support will collapse after that,” Chin told CNBC’s “Street Signs” on Tuesday.

Even then, a delay in the legal process and greater visibility on social media platforms could benefit Najib if it lasts long enough for the political climate in Malaysia to change, according to Oh Ei Sun, a senior fellow at the Singapore Institute of International Affairs.

“If the political tide in the country turns, let’s say, in a few years’ time, then he could well be back in power, for example, or his allies could be back in power and he could then be absolved of all these charges,” Oh told CNBC’s Sri Jegarajah on Tuesday. Oh was Najib’s political secretary in 2009 to 2011.

Najib was voted out of office in a historic election that ended the 60-year rule of Barisan Nasional, a coalition of political parties in power since Malaysia’s independence. The upset, experts said, can be largely attributed to Najib’s alleged involvement in the 1MDB scandal — in which billions of dollars were allegedly siphoned off the investment company set up to steer Malaysia’s economic development. Some of those funds allegedly ended up in Najib’s personal bank account.

Source link

World

China reports March trade data on exports and imports

Published

on

Workers manufacture cotton yarn at a factory in Dali county, Shaanxi province, China.

Nelson Ching | Bloomberg | Getty Images

Workers manufacture cotton yarn at a factory in Dali county, Shaanxi province, China.

China’s exports for the month of March came in much higher than expected, while its imports came in much lower than expected, according to customs data released on Friday.

Dollar-denominated exports rose 14.2 percent for March from a year ago, topping expectations of a 7.3 percent rise from a year ago, according to a Reuters poll.

But dollar-denominated imports were down 7.6 percent in March from a year ago, falling short of expectations of a 1.3 percent decline from a year ago.

All told, that gave China a March trade surplus of $32.64 billion, according to Reuters and Dow Jones calculations. Dow Jones said the surplus was only expected to have come in at $6 billion and Reuters had expectations at $7.05 billion.

Following the release of the data, the offshore Chinese yuan strengthened to 6.7225 against the dollar from 6.7303, according to Reuters.

The International Monetary Fund upgraded its 2019 growth forecast for China in a Tuesday report, citing Beijing’s efforts to support the economy and an improved outlook for the Asian giant’s tariff fight with the U.S.

The IMF said in its latest World Economic Outlook report that China is projected to grow by 6.3 percent this year, higher than the fund’s previous forecast of 6.2 percent.

Meanwhile, hopes are high that the U.S. and China could be close to a trade deal, with Treasury Secretary Steven Mnuchin telling CNBC that Washington and Beijing have “pretty much agreed on an enforcement mechanism” for when a deal is struck.

— Reuters and CNBC’s Yen Nee Lee and Eustance Huang contributed to this report.

Source link

Continue Reading

World

Mohamed El-Erian on Federal Reserve, US economy, growth divergence

Published

on

Despite the expected steady growth in the U.S., the outlook for other major economies appeared to be challenging, according to El-Erian.

Europe, he said, would be “lucky” to grow by 1 percent this year given the challenges facing the largest economies in the region. The International Monetary Fund’s data on euro area growth — which consists of Germany, France, Italy and Spain — showed 1.8 percent expansion in 2018. The IMF estimated that the four economies would expand by 1.3 percent this year.

At the same time, the state of the Chinese economy remained uncertain despite recent improvements in several indicators, El-Erian told CNBC.

He added that the Asian giant still faces a difficult external environment, which could hit Chinese exports further, while a trade deal with the U.S. would be “more a ceasefire than lasting peace.”

“The major theme, for me, for this year is not a synchronized slowdown. Synchronized slowdown suggests that countries feed onto each other and the whole thing starts coming down in a violent fashion,” the economic advisor said.

Rather, El-Erian said, “the major theme is divergence.”

From an investment perspective, foreign-exchange markets, especially, would find it challenging to navigate such a trend, he added.

While some experts have predicted that the U.S. dollar would weaken or stabilize in the coming months, El-Erian said the greenback could “appreciate further from here.” That will put pressure on emerging market currencies and hit companies that borrow in U.S. dollars but generate much of their revenue in their local currencies, he explained.

Source link

Continue Reading

World

UBS Chairman Axel Weber on Europe growth challenges

Published

on

Europe’s challenges, according to the UBS chief, go beyond the effectiveness of fiscal and monetary policies to boost growth. He pointed out three areas: First, European infrastructure and technology developments lag behind the U.S. and China.

“It needs to improve, and therefore needs investment into infrastructure, into digital economy, into 5G technology in order to catch up. They need to catch up fast and therefore they need to start investing now,” he said.

As Beijing and Washington inch closer to a trade deal, U.S. President Donald Trump recently took a swipe at the European Union. On Twitter, he called the EU a “brutal trading partner with the United States,” and declared that “will change.”

Weber said Trump’s shift in focus to Europe may invite renewed debate on trade relations.

“That all will not help the recovery in Europe because, as we have seen, if there are trade tensions, there’s a higher uncertainty. It impacts negatively on investment and consumption and, therefore, it drags out any possible recover,” he said.

Brexit is also set to prolong uncertainty in Europe.

While it presently looks unlikely that the U.K. will leave the EU without a deal in place (a so-called hard Brexit), the road ahead remains unclear, according to Weber. Brexit, he said, is still characterized by a huge amount of uncertainty on investment decisions, trade and location decisions.

Earlier this week, EU leaders and the U.K. government agreed to a ‘flexible extension” of the Brexit deadline until Oct. 31. The U.K. was initially meant to leave the bloc on March 29 but was granted an extension to April 12 while the British Parliament failed to agree on any exit deal.

“So, this uncertainty is weighing down on European growth and it cannot be resolved by monetary or fiscal policy,” Weber said.



Source link

Continue Reading

Trending