Info seputar SGP Hari Ini 2020 – 2021.
A quick stock markets check-in: the FTSE 100 has improved somewhat, and it’s now only down by seven points, or 0.1%, at 7,019.
US stock market futures suggest that shares on Wall Street will also dip after the opening bell in an hour and a bit. S&P 500and Dow Jones industrial average futures are down by 0.2% apiece at the time of writing.
One of the Bank of England’s monetary policymakers has argued that stimulus should remain in place because “we are not out of the woods”, in his final speech in the position.
Gertjan Vlieghe said the UK still faces economic risks from the coronavirus pandemic, and added that any rise in inflation in the coming months is likely to be temporary, in a speech on Monday hosted by the London School of Economics.
Vlieghe is leaving the Bank after a six-year term on the monetary policy committee (MPC), the nine-member body responsible for setting interest rates.
Vlieghe’s departure could shift the balance of the committee. Two of the eight current members of the MPC, deputy governor Dave Ramsden and Michael Saunders, have recently raised the possibility of removing some of its stimulative bond purchases. However, incoming economist Catherine Mann is also seen as a likely “dove” in favour of keeping some stimulus in place.
Vlieghe said demographic changes are lowering interest rates in the long term, and that in the short term the Bank should hold back from removing stimulus. He said:
I think it will remain appropriate to keep the current monetary stimulus in place for several quarters at least, and probably longer. And when tightening does become appropriate, I suspect not much of it will be needed, given the low level of the neutral rate.
He said he wanted to see the effects of the end of the government’s furlough scheme, which is supporting the wages of millions of British workers, before tightening monetary policy. He also said:
Even though the e xpected peak in inflation now looks to be higher than previously expected, I have not changed my view that this inflation peak is likely to be temporary. It is driven by supply bottlenecks and base effects, both of which are set to wane next year.
Second, we are not out of the woods yet in terms of the virus and the impact on the economy. Yes, the economy has been growing rapidly, but on the most recent data it remains an average recession away from full employment.
British businesses’ water bills could rise after the regulator gave providers the go-ahead in order to cover some of the costs of the Covid-19 pandemic.
The UK’s water regulator is to allow utility companies to increase prices temporarily starting next year to offset higher bad debt costs because of the Covid-19 pandemic.
Water companies from April will bear 25% of bad debt costs where these are more than 2% of non-household revenue, and non-household customers will bear the rest, the Water Services Regulation Authority (Ofwat) said in a statement.
The price of bitcoin surged by 10% on Monday as traders seized on an Amazon job advertisement that showed the company is looking at digital currencies.
One bitcoin was worth nearly $40,000 on Monday, up from $34,000 at midnight on Sunday. That was the highest price since mid-June – albeit far short of the levels near $65,000 seen as recently as April. It traded at $38,420 at the time of writing.
Bitcoin and other cryptocurrencies have proven wildly volatile as financial assets, with hints of interest from large companies regularly triggering big increases in price.
The Amazon job advert said it wanted a “digital currency and blockchain product lead” to work in its payments acceptance and experience team”, but gave few other details.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, an investment fund platform, said:
When a simple job ad appears to spark resurgence in the value of bitcoin, it shows how the crypto world is salivating for every nugget of news about the future use case for digital currencies.
Given the might of Amazon Web Services, it isn’t surprising that the tech giant wants to be at the cutting edge of new payments technology and establishing a new digital currency is likely to be on the agenda. But the expectation that payment may also be accepted from the current crypto kids on the block has also led to a spike in their value.
The Amazon job ad asked for candidates who have the “ability to thrive in an ambiguous and constantly changing environment” – whether that referred to Amazon or cryptocurrencies more generally is unclear.
Considering the unprecedented freeze in economic activity during pandemic lockdowns, the UK economy’s recovery was always going to generate some spectacular numbers. The signs are that it will outpace anything seen since the wartime economy of 1941.
The British economy is growing at its fastest pace in 80 years and could recover its pre-pandemic size by the end of this year, according to a leading economic forecaster, reports the Guardian’s Zoe Wood.
Buoyed by the vaccine rollout and a bounce back in consumer spending, the EY Item Club said it now expected GDP to grow by 7.6% – which would be the fastest annual growth in national income since 1941. The UK economy shrank by 9.8% in 2020, the worst performance in the G7.
The optimism comes despite the chaos caused by widespread staff shortages as workers self-isolate en masse after being pinged by NHS test and trace. The “pingdemic” is affecting the running of shops, restaurants, factories and even railway services as bosses struggle to find staff to cover shifts.
Yet the recovery should not distract from the economic damage done by the pandemic. Reaching the same size as before the pandemic would be a notable achievement, but the UK has still missed out on months of growth. GDP is estimated by the Office for National Statistics to have grown for a fourth consecutive month in May 2021 , by 0.8%, but it was still 3.1% below its pre-pandemic level.
You can read the full story here:
The FTSE 250 bin collection company Biffa has been found guilty of illegally exporting 1,000 tonnes of household waste to Asia.
The shipments were labelled as paper, but contained “soiled nappies, tins, hairpieces, plastics, as well as clothing and food packaging”, according to a stomach-churning statement from the UK’s Environment Agency. “Investigators said the bundles gave off a putrid odour,” it said.
The company, which is valued at £1bn, will be sentenced on Friday after it was found guilty of breaching regulations on exporting waste at Wood Green crown court, in London.
The Environment Agency has been working on new measures to tighten controls such as more regular monitoring of shipments, after the problem of exported waste attracted more attention.
Malcolm Lythgo, head of waste regulation at the Environment Agency, said:
We are pleased with the court’s decision. We want all producers and waste companies to be responsible and make sure they only export material that can be legally and safely sent abroad for recycling.
Illegal waste exports blight the lives and environment of those overseas. The Environment Agency will not hesitate to take appropriate enforcement action against those found to break the rules.
In a statement, Biffa said:
No public interest has been served by the Environment Agency in bringing this prosecution. The UK does not have the infrastructure to recycle all of the wastepaper that householders send for recycling, meaning export is essential to avoid having to landfill or incinerate this valuable resource. The case established that the paper we were sending for export was over 99% pure. This is no different from the waste paper that is recycled in the UK. It would have been used as raw material to make cardboard packaging.
The recycling industry has tried to engage with the Environment Agency on developing standards for export that reflect the realities of recycling that it can be measured against, but the agency has not cooperated. Biffa no longer exports wastepaper outside the OECD but the industry overall has no choice but to do so. We urgently request that a set of coherent policies are put in place that either put exports on a stable footing or stimulate the necessary investment in the UK so that it is no longer needed.
*This post has been updated to include Biffa’s statement.
An interesting new front may be opening in the relationship between the UK and China: the government is considering backtracking on allowing Chinese companies to operate British nuclear power stations.
The Financial Times reported (£) that cooling of relations between the two countries has now extended to the sensitive issue of nuclear power.
Here’s last night’s report, from Press Association, confirming the FT’s reporting.
China’s state-owned nuclear energy company could be blocked from all future power projects in the UK, with ministers understood to be investigating ways to prevent its involvement.
The move would exclude China General Nuclear (CGN) from the consortium planning to build the £20bn Sizewell C nuclear plant on the Suffolk coast, as well as one in Bradwell-on-Sea in Essex.
A Whitehall source confirmed a report by the Financial Times that first revealed the government is exploring ways of removing CGN from future projects.
The FT’s sources have given some fairly punchy indications (albeit off record). “There isn’t a chance in hell that CGN builds Bradwell,” said one person quoted.
You can read the rest of the report here:
German business confidence has dropped further than economists have expected. The Ifo business climate survey might have raised the spirits of European markets on what is proving to be quite a limp start to the week, but it hasn’t turned out that way.
The long-running survey, followed by economists as a gauge of activity in Europe’s largest economy, showed that confidence declined. The reading came in at 100.8 for July, down from 101.8 in June and 1.3 points below economists’ average forecasts.
“This is not what the doctor ordered”, said Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, a consultancy.
The goods news is that these data indicate that economic momentum was sustained at the start of the third quarter, after what was almost surely a significant rebound in the second quarter. The bad news is that business leaders now see growth fading towards the end of the third quarter. This could be because executives now fret new restrictions in the face of the Delta-surge, though it could also simply be reflecting the realty that nothing goes up in a straight line. Growth can remain solid, even if the pace declines.
Here is a graph that shows why the Ifo survey is handy: it acts as a leading indicator for GDP. On this basis the recovery from the depths of the Covid-19 recession should continue rapidly.
*I have corrected a previous post. Please refresh the page to see the updated version.
Looking at what is dragging back the FTSE 100, there is a fairly clear pattern: banks and financials are the biggest fallers.
Banks tend to be quite sensitive to the country’s economic weal and woe, so they can be vulnerable during a broader market selloff.
On the other hand, mining companies Antofagasta and Rio Tinto are the biggest gainers, up 1.4% and 1% respectively, as gold and silver prices rose.
More aviation news: Heathrow Airport’s tally of losses during the pandemic has now hit £2.9bn.
Here is a stat that sums up their difficulties: fewer than 4m people travelled through Heathrow in the first six months of 2021, a level that would have taken just 18 days to reach in 2019.
Revenues for the first six months were £348m, half of the £712m in the first half of 2020 (which had a few months of relative normality before the UK woke up to the pandemic). The loss for the perid was £868m.
Unsurprisingly, Heathrow is desperate to open up. Coronavirus case numbers are rising, but the airport’s leaders argue that quarantine restrictions are harming the UK economy.
Heathrow chief executive John Holland-Kaye said:
The UK is emerging from the worst effects of the health pandemic, but is falling behind its EU rivals in international trade by being slow to remove restrictions. Replacing PCR tests with lateral flow tests and opening up to EU and US vaccinated travellers at the end of July will start to get Britain’s economic recovery off the ground.
Ryanair bumps up passenger forecast after summer surge
Ryanair is expecting to fly 100m passengers during this financial year after a surge in summer bookings in recent weeks, although it warned that it does not expect to make a profit this year.
The Irish airline increased its passenger forecast to between 90m and 100m for the 12 months to the end of March 2022, thanks to the coronavirus vaccination programme and the easing of some travel restrictions.
It expects to carry larger numbers of passengers over the summer, almost doubling from 5m passengers in June to almost 9m in July, and reaching 10m in August, provided there are no further setbacks as a result of Covid.
China appears to have set the tone for stock markets in Europe: every major index is in the red on Monday morning.
The FTSE 100 has lost 0.4%, Germany’s Dax has lost 0.5%, while France’s Cac 40 is down by 0.3%.
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Chinese stock markets hit their lowest level since December on Monday as investors took fright over tightening regulation. The tech sector has been under pressure in recent weeks, and now the Communist party government has turned its attention to the vast private education sector and property sectors.
For-profit tutoring in subjects on the school curriculum will be barred, ostensibly to reduce financial burdens on families and make having more children more attractive, as China seeks to arrest a fall in its population that has reportedly alarmed the country’s leadership. Foreign investment in private tutoring companies will also be heavily restricted.
Private tuition is widely used in China. Indeed, Reuters cited data from the Chinese Society of Education suggesting that more than 75% of students aged from around 6 to 18 in China attended after-school tutoring classes in 2016.
And in the tech sector shares in Tencent, the giant internet conglomerate, have fallen after it was ordered to forgo exclusive music licensing deals, a move that could reduce its dominance of streaming in China. The government has already sought to clip the wings of ride-hailing company Didi Chuxing.
Meanwhile, the Chinese government has also said it will try to sort out irregularities in its property sector within three years. For years many economists have been warily eyeing the sector for possible overheating. The CSI 300 real estate index lost 6.2% on Monday, and developer Evergrande – whose massive debt burden is seen by some as a potential risk to financial stability – lost 5.7%, leaving it down by more than half this year.
The CSI 300 index, which tracks blue-chip companies on the Shanghai and Shenzhen stock exchanges, had dropped 3.4% at the time of writing. It was a 10-week low. Hong Kong’s Hang Seng index lost 3.5%.
Economists at Nomura warned that things could be difficult for the Chinese economy this year in general. They wrote (via Reuters):
We believe China’s economy, and specifically its financial system, will face significant risks in coming months due to the unprecedented tightening measures applied to the property sector.
Japanese stocks, however, performed better on Monday. On the first trading day of the Tokyo Olympics its broad Topix index gained 1.1% and the Nikkei 225 gained 1%.
*This post has been corrected. The original incorrectly listed purchasing managers’ index data as happening on Monday 26 July. In fact, those data will be published on Monday 2 August. Apologies for the error.