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Wednesday, 01 October 14
FITCH: GLOBAL ECONOMY FACES MULTI-SPEED RECOVERY, MULTIPLE RISKS
 Fitch Ratings says in its latest Global Economic Outlook (GEO) that global growth will pick up in 2015 and 2016, but risks are weighted to the downside. The contribution of major advanced economies (MAEs) to global expansion will gradually increase, while growth will remain subdued in emerging markets (EMs) after the cyclical trough this year. Fitch’s latest forecasts for world GDP growth (weighted at market exchange rates) are 2.6% in 2014, accelerating to 3% in 2015 and 3.1% 2016.
The 2014 and 2015 forecasts are both 0.1pp lower than in the June GEO. The downward revisions, similar to previous quarters, are mainly due to emerging markets. For the US economy Fitch maintains its forecast of robust GDP growth of 3.1% in 2015 and 3% in 2016, up from 2.2% in 2014. The economy rebounded strongly in 2Q14 after a temporary setback in 1Q14. Private consumption growth is underpinned by improving household income, wealth and confidence.
Investment should be supported by high corporate cash piles and profitability, low financing costs, rising confidence and capacity utilisation. Monetary policy remains highly accommodative and the drag from fiscal consolidation is significantly smaller than it was in 2013. We forecast eurozone GDP growth of 0.9% in 2014, followed by 1.3% in 2015 and 1.5% in 2016, slightly weaker than in the June GEO. Output stagnated in 2Q14 following four quarters of insipid growth, due primarily to a sharp slowdown in Germany.
Over the forecast horizon growth will be supported by the US and UK recoveries, euro depreciation, ECB policy loosening and an easing in the pace of fiscal consolidation. However, faltering recent outturns suggest deleveraging and structural constraints remain formidable headwinds, eroding potential benefits from improving external conditions or policy stimulus. High unemployment will persist and remain above 11% until 2016. Fitch’s base case is for eurozone inflation to be low at 0.5% in 2014, 1% in 2015 and 1.3% in 2016, but for protracted deflation to be avoided. However, current low inflation, weak demand, a decline in market inflation expectations, policy challenges and the potential for self-reinforcing dynamics make deflation a meaningful and rising risk.
We forecast EM growth to slow sharply from 4.7% in 2013 to 4% in 2014, before recovering somewhat in 2015-16. Looming US monetary policy tightening, geo-political tensions and lower commodity prices pose downside risks. Brazil is now in recession and Russia close to it. Fitch expects both to see only a subdued recovery in 2015 and 2016, underperforming most MAEs over the forecast period.
Fitch expects China’s GDP growth to moderate to 7.2% in 2014, 6.8% in 2015 and 6.5% in 2016 as it gradually rebalances while seeking to contain leverage. India will be the only BRIC country where growth picks up in 2014 to 5.6% and accelerates further to 6.5% in 2015 and 2016, owing to an expected improvement in the business environment.
The underlying momentum of the Japanese economy is uncertain after sharper-than-expected contraction in 2Q14. We have revised down GDP growth to 1.4% in 2014, from 1.6% previously, and are maintaining our forecast of 1.3% for 2015 and 2016. Higher wage growth is central to Japan’s prospects of achieving sustainably higher real and nominal GDP growth. Growth in the UK has been strong and broad-based. Fitch is maintaining its forecast that growth will slow from 3% in 2014 to 2.5% in 2015 and 2.3% in 2016, as it moves to its medium-term potential rate of 2%-2.25%.
The base case is that nominal wage growth will pick up as the labour market slack is absorbed and the currently weak productivity growth will improve, in line with previous cyclical recoveries. The coming quarters will see increasing divergence of monetary conditions in MAEs after six years of synchronised, ultra-loose monetary stance.
Fitch expects the Fed and Bank of England to start gradually tightening policy over the next few quarters. Meanwhile, the ECB announced further easing measures at its September meeting and the Bank of Japan is continuing with its qualitative and quantitative easing strategy. The ECB and Bank of Japan are likely to keep interest rates unchanged until at least 2016. This GEO edition’s alternative scenario explores the global impact of a US interest rate shock. In this scenario the Federal Funds rate increases to 5% and the ten-year US yield reaches 6% by end-2016, triggered by an initial inflation shock as the economy runs out of spare capacity much sooner than policy makers and the markets currently expect.
Furthermore volatility spikes in global financial markets and leads to a 150 bps increase in global risk premium. Growth slows sharply in the US from mid-2015 and the economy stagnates in 2016. According to the simulation results the impact on MAEs is limited and stems mainly from lower US demand. Nevertheless the shock raises the risk of a new recession in the eurozone as the baseline recovery is so weak. In many EMs, central banks tighten monetary conditions due to the higher risk premium and inflation, despite the economic slowdown. Russia and Brazil would remain close to recession in 2015 and 2016, while India would slow sharply and China would be the least affected among the BRICs.
Source: Fitch Ratings
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Thursday, 09 November 23
GREEK AND CHINESE COMPANIES OWN 34% OF THE GLOBAL FLEET’S CARGO CAPACITY - BIMCO
“The global fleet of cargo carrying ships consists of around 61,000 ships with a deadweight capacity of about 2,200 million tonnes. The ships ...
Monday, 23 October 23
CHINA SEPT COAL OUTPUT HITS SIX-MONTH HIGH ON RISING POWER DEMAND - REUTERS
China’s September coal output rose 0.4% from August to the highest level since March, official data showed on Wednesday, on rising power dema ...
Monday, 23 October 23
INDIA COAL INVENTORIES DROP AT FASTEST PACE IN TWO YEARS, BOOSTING IMPORTS - REUTERS
Coal inventories at Indian power plants in the first half of October fell at their fastest rate in two years, an analysis of government data showed ...
Tuesday, 19 September 23
LNG SHIPPING STOCKS: THE ASIAN GROWTH UP-INDICES
Last week, the UP World LNG Shipping Index (UPI) gained 3.81 points or 2.51%, closing at 155.85 points. This index tracks the performance of LNG sh ...
Sunday, 10 September 23
GOLDMAN SACHS PREDICTS OIL PRICE TO HIT $100 ON OPEC CUTS - YAHOO FINANCE
Oil supply cuts by Saudi Arabia and Russia could lead to Brent crude jumping as high as $107 a barrel in 2024, Goldman Sachs Commodities Research h ...
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- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Coastal Gujarat Power Limited - India
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Karbindo Abesyapradhi - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Planning Commission, India
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Power Finance Corporation Ltd., India
- McConnell Dowell - Australia
- White Energy Company Limited
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Meralco Power Generation, Philippines
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Independent Power Producers Association of India
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- Deloitte Consulting - India
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Bhushan Steel Limited - India
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- San Jose City I Power Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
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