Global shares advance amid hopes for US-China deal

US shares drifted higher on Monday with Dow futures adding 0.3 percent to 27,931 and S&P 500 futures rising 0.2 percent to 3,119. (Reuters/File)
Updated 25 November 2019

Global shares advance amid hopes for US-China deal

  • Beijing’s new guidelines for protecting intellectual property seen as a key concern for foreign investors

TOKYO: Global shares rose on Monday amid some optimism that the US and China may be edging closer toward a deal on a trade dispute that has been rattling markets for more than a year.

Over the weekend, Beijing issued new guidelines for protecting intellectual property, a key concern for foreign investors and a sore point in the dispute with Washington over trade and technology.

Britain’s FTSE 100 rose 0.9 percent to 7,394, while France’s CAC 40 added 0.4 percent in midday trading to 5,915. Germany’s DAX gained 0.4 percent to 13,221 after a survey showed that German business confidence has increased slightly.

US shares drifted higher with Dow futures adding 0.3 percent to 27,931 and S&P 500 futures rising 0.2 percent to 3,119.

Japan’s benchmark Nikkei 225 surged 0.8 percent to finish at 23,292.81, while Australia’s S&P/ASX 200 added 0.3 percent to 6,731.40. South Korea’s Kospi gained 1.0 percent to 2,123.50. Hong Kong’s Hang Seng jumped 1.5 percent to 26,993.04, while the Shanghai Composite advanced 0.7 percent to 2,906.17.

Investors were watching the situation in Hong Kong, where pro-democracy candidates won a majority of seats in a local district council election Sunday. After nearly six months of often violent protests, it is yet another challenge for CEO Carrie Lam’s government.

“The result might not be market-friendly as it sets to challenge Carrie Lam’s leadership and bring up political uncertainties. But it could also mark a turning point in stopping the violent clashes,” said Margaret Yang, market analyst at CMC Markets in Singapore.

Markets around the world churned last week on uncertainty about whether the US and China can soon halt their trade dispute, or at least stop it from escalating.

Tariffs already put in place have hurt manufacturing around the world, and businesses have held back on spending given all the uncertainty about where the rules of global trade will end up.

New US tariffs are set to hit Dec. 15 on many Chinese-made items on holiday shopping lists, such as smartphones and laptops.

A document issued Sunday called for China to “effectively curb” violations of intellectual property rights such as trademarks and copyrights. The guidelines ordered improvements to laws for protecting such intellectual property, increased compensation for infringements and stricter enforcement of existing laws.

Theft and forced transfers of technology and inadequate protection of copyrights, patents and trademarks are perennial complaints of foreign companies operating in China and are among the key issues in the latest flareup in trade tensions.

President Donald Trump said last week that a deal is “potentially very close” after Chinese President Xi Jinping said Beijing is working to “try not to have a trade war,” but will nevertheless fight back if necessary.

In corporate news, shares in Uber fell about 6 percent in premarket after London’s transit authority refused to renew the San Francisco company’s license to operate there over passenger safety concerns. Uber vowed to appeal the decision, which it called “extraordinary and wrong.” The ride-hailing company has 21 days to file an appeal and can continue operating while the appeals process is under way.

Two blockbuster mergers got Thanksgiving week off to a rousing start Monday morning. Shares of Tiffany & Co. rose nearly 6 percent in premarket trading after Paris-based LVMH said it was acquiring the iconic New York jeweler for $16.2 billion. 

In another massive deal, Charles Schwab said it would buy rival TD Ameritrade in a $26 billion stock swap. With brokerages facing competitive pressure to make it free for customers to trade US stocks online, Schwab’s buyout combines two of the biggest players in the industry, with a combined $5 trillion in client assets. The deal could draw sharp scrutiny from antitrust regulators.


Saudi Arabia pumps 12m barrels of oil for the first time

Updated 02 April 2020

Saudi Arabia pumps 12m barrels of oil for the first time

  • Daily record smashed amid market turmoil
  • Previous record output was about 11 million barrels

DUBAI: Saudi Arabia pumped more than 12 million barrels of oil on Wednesday for the first time in its history.

The Kingdom has vowed to ramp up production as an oil “price war” shakes the global energy industry following the end of a supply agreement with other producers.

Officials at Saudi Aramco, the world’s biggest oil company, and the Saudi Ministry of Energy, Industry and Mineral Resources told Arab News that crude output on the first day of April — when the OPEC+ agreement to limit supply lapsed — was more than 12 million barrels. Some reports put it at 12.3 million.

The Kingdom’s previous record output was about 11 million barrels, achieved only briefly.


SPOTLIGHT: From Middle East to USA, coronavirus impact transforms oil industry’s dynamics


Aramco had pledged to increase its maximum sustainable capacity (MSC) — the level at which it can safely maintain long-term output — to 12.3 million in the coming months; that it has already hit this level is regarded as a measure of its operational efficiency and the Kingdom’s determination to win the battle for market share.

The company released a short video showing laden oil tankers sailing away from Saudi ports. It said it had loaded 18.8 million barrels onto 15 tankers, which would have taken about three days.

Aramco’s strategy of large output increases and significant discounts to customers — labeled a “shock and awe” play by energy experts — has transformed the oil industry. The price of crude oil plunged as demand for energy was hit by the coronavirus pandemic. Some producers, especially in the US where extraction costs are high, are facing financial disaster.

“If Saudi Arabia sustains this, it would be an unprecedented demonstration of their MSC,” said Robin Mills, chief executive of the Qamar energy consultancy. “Assuming that it is production, and not just drawing down on storage, it’s an impressively quick ramp-up.”

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It was also notable that production was unaffected by any lingering issues from terrorist attacks last September on Aramco facilities at Abqaiq and Khurais, Mills said.

Despite the flood of oil onto global markets, the Brent crude global benchmark price rose by about 10 per cent toward $25 per barrel after US President Donald Trump said he thought the price was too low, and offered talks with Saudi Arabia and Russia about the global oil glut.

Shares in Saudi Aramco rose for a third consecutive day, up 1.5 per cent to SR30.6.

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