Briefs

The British pound rallied and UK stocks turned higher as Britain and the European Union finally reached a historic Brexit deal on Oct 17.

“We have a great new deal that takes back control,” British Prime Minister Boris Johnson said in a Twitter post. “Now Parliament should get Brexit done on Saturday so we can move on to other priorities like the cost of living, the NHS, violent crime and our environment.”

The agreement, which comes after three years of negotiations, paves the way for Britain to finally break its 46-year-old ties to the EU. However, the withdrawal agreement still has to be ratified in the UK Parliament, where Johnson lacks a majority.

Support from Northern Ireland’s Democratic Unionist Party, which had earlier refused to back a deal, is said to be crucial if Johnson is to get a deal through Westminster.

“In typical eleventh hour fashion, the UK and EU have agreed to a new Brexit deal, sending the pound soaring to seven-month highs against the US dollar,” said Craig Erlam, senior market analyst for the UK and Europe, the Middle East and Africa at OANDA. But he warned: “Anyone hoping that the process will be straightforward now is kidding themselves.” — By Stanislaus Jude Chan

Trump warns Erdogan not to be ‘tough guy’ or ‘fool’

US President Donald Trump wrote a letter to Turkish leader Recep Tayyip Erdogan calling on him to “work out a good deal!” and warning him not to be a “tough guy” or “fool”.

“History will look upon you favourably if you get this done the right and humane way,” according to the Oct 9 letter, reported earlier by Fox Business Network and confirmed by the White House. “It will look upon you forever as the devil if good things don’t happen.”

Trump has been trying to contain the damage from his sudden move earlier this month to pull US forces from northern Syria, allowing Turkey to proceed with a military operation in the region. The withdrawal left Kurdish fighters who fought for several years alongside US troops against Islamic State exposed to attack from the Turkish military.

Trump on Oct 16 stood by his decision, rejecting criticism from key Republican supporters in Congress that he abandoned Kurdish allies and allowed Russia to fill the void. — Bloomberg LP

Jeers force Hong Kong leader to abandon policy speech

Hong Kong Chief Executive Carrie Lam had to abandon her policy speech because of jeering lawmakers on Oct 16 but later offered no direct olive branch to pro-democracy protesters, hoping instead to ease resentment by building more public housing.

Lam, who had to broadcast the annual address via a video link after the rowdy scenes in the Legislative Council, had hoped to try to restore confidence in her administration after four months of often-violent anti-government and anti-China protests.

She gave up initial attempts to deliver the address after pro-democracy lawmakers called out for “five demands, not one less” and projected the protest rallying cry on to a backdrop behind her.

The demands include universal suffrage for the Chinese-ruled city and an independent inquiry into what they say has been excessive force by police in dealing with the unrest.

Protesters have trashed government buildings, including the Legislative Council, daubed businesses seen as pro-China with graffiti, set street fires and thrown petrol bombs at police who have responded with water cannon, tear gas, rubber bullets and several live rounds.

Police have arrested more than 2,300 people since June. Thousands have been wounded, including two shot by live rounds. — Reuters

Fintech investment in Singapore crosses billion-dollar mark

Investment in financial technology deals in Singapore has crossed the $1 billion mark in the first nine months of 2019, according to a study by consulting firm Accenture, drawing data from CB Insights, Pitchbook and Tracxn.

The total value of fintech deals jumped 69% y-o-y to US$735 million ($1 billion) in the nine months ended Sept 30, from US$435 million. In contrast, the total value of the deals in 2018 was US$642 million.

“Crossing a billion-dollar investment threshold is recognition from investors around the world of the potential of Singapore’s fintech ecosystem and the outlook for digital financial services not just in Singapore, but also in Southeast Asia,” said Sopnendu Mohanty, chief fintech officer of the Monetary Authority of Singapore. He noted that fintech investment in Singapore had increased nearly sixfold y-o-y from 2015. — By Chan Chao Peh

NODX contracts for seventh straight month with 8.1% drop in September

Singapore’s non-oil domestic exports fell 8.1% y-o-y in September, marking the seventh consecutive month of contraction amid uncertainty surrounding the US-China trade war and slowing global growth.

The decline was led by a 24.8% drop in electronic exports, which clocked 10 straight months of negative growth, while non-electronic exports dipped 2.3%.

Meanwhile, non-oil re-exports — seen as an indication of the health of the wholesale trade sector — grew 3% y-o-y in September, a reversal of three consecutive months of contraction between June and August.

Speaking at a conference on Oct 16, Prime Minister Lee Hsien Loong said Singapore’s economic growth momentum had “substantially diminished” because of the trade disputes, which have cast a pall over the whole global economy. “It has caused consumers to hold back; it has caused investors to hold back. Trade volumes have come down, growth rates have come down. Our growth rate has come down,” Lee said.

Sung Eun Jung, an economist at Oxford Economics, opines that Singapore’s export growth will remain sluggish for some time. “The decline in goods export volumes moderated in September as re-exports growth turned positive again. However, the outlook for exports remains challenging with a significant policy uncertainty surrounding the US-China trade war and slowing global growth,” Sung said. — By Stanislaus Jude Chan

MAS eases monetary policy ‘slightly’ for first time in three years

The Monetary Authority of Singapore has eased the monetary policy “slightly” — the first easing in over three years — amid slowing economic growth.

In its latest half-yearly monetary policy review on Oct 14, MAS says it is reducing the rate of the Singapore dollar’s appreciation. The slope of the Singapore dollar nominal effective exchange rate (S$NEER) will be reduced, but the width of the policy band and the level at which it is centred remain unchanged.

The S$NEER is the trade-weighted basket of currencies against the Singapore dollar, which has been a key policy tool for MAS.

The central bank notes that the slight easing is “consistent with medium-term price stability, [amid] the current economic outlook”. It adds, however, that it “will continue to closely monitor economic developments and is prepared to recalibrate monetary policy should prospects for inflation and growth weaken significantly”.

The easing — in line with economists’ expectations — comes as Singapore recorded a near-nil economic growth of 0.1% y-o-y during the quarter. — By Amala Balakrishner