Showing posts with label Asia. Show all posts
Showing posts with label Asia. Show all posts

Sep 15, 2020

News | Business | Asia: GDP of 'developing Asia' set to contract for the first time in nearly six decades, ADB says

 Saheli Roy Choudhury


A man eats a takeaway meal on a chair placed outside a restaurant in Hong Kong

A man eats a takeaway meal on a chair placed outside a restaurant in the Kowloon-side Sham Shui Po district of Hong Kong in the early morning of July 29, 2020, as new social distancing measures come into effect which include restaurants only being allowed to serve takeaway meals, to combat a new wave of coronavirus infections.

Anthony Wallace | AFP | Getty Images

SINGAPORE — Developing Asia, which includes countries like China, India, Indonesia and Singapore, will contract this year for the first time in about six decades as the coronavirus pandemic continues to hammer economies worldwide, the Asian Development Bank said.

In its updated outlook report, ADB said GDP in developing Asia will contract 0.7% this year. The bank also said three-fourths of the region’s economies are set to shrink in 2020, downgrading its GDP forecasts for those countries. 

The pandemic, which has now infected more than 29 million people worldwide, slowed domestic consumption, affected external demand and hit exports, Yasuyuki Sawada, ADB’s chief economist, said Tuesday on CNBC’s “Street Signs Asia.” 

“On top of this, travel bans really undermine free flow of people as well as goods and services trade,” he said. 

In an attempt to slow the spread of the virus, some countries have shut down borders to non-residents while most have implemented varying degrees of social restrictions, including periods of total lockdowns in places like India. 

South and Southeast Asia

Southeast Asia was previously expected to grow 1% for the year, but is now predicted to contract 3.8%, with Thailand, the Philippines and Singapore each set to experience declines of more than 6%, the ADB said. The Philippines and Indonesia have reported the most number of infections among Southeast Asian countries. 

China, where the coronavirus outbreak was first reported in late-December, is the only country that is expected to register positive growth, albeit far below levels the world’s second-largest economy has reported in recent years. China is set to register a 1.8% expansion in 2020, down from an earlier forecast of 2.3%, as its economy slowly gets back on track, according to the report. 

Infection levels in the country appear to be under control. That is in contrast to the rapid outbreak in India, which is now the pandemic’s epicenter in Asia with more than 4.8 million reported cases. 

India is predicted to register a 9% decline for the calendar year 2020, the ADB said. That was revised down from an earlier forecast of 4% growth. India’s fiscal year runs from April 1 to March 31 the following year. In the three months between April and June, India’s economy shrank at its steepest pace of 23.9% following a national lockdown between April and May. 

Growth rebound

Growth will likely rebound in 2021 with developing Asia expected to register a 6.8% expansion. India is set to grow 8% for the next calendar year, according to the report.

“Our baseline assumption is basically Covid-19 can be controlled within this year, towards the end of this year. Once the health risks are contained, we can envision a strong bounce back,” Sawada told CNBC. He explained that governments in developing Asia and Pacific countries have already announced support measures totaling more than $3 trillion, with some as high as 15% of GDP. Many of those countries still have room for further expansionary or accommodative policy, he said.

“I think this is very, very important to keeping households, especially poor households and vulnerable groups as well as micro-and-small enterprises maintain and keep alive, so that after the containment of health crisis, they can strongly recover back,” Sawada said, adding that the “large-scale package helped to stabilize financial markets.” 

A bulk of the amount came from governments in East Asia, particularly China, ADB data showed

But the bank in its report warned that a prolonged wave of Covid-19 infections could stifle recovery and further disrupt demand and supply while worsening geopolitical tensions, notably among U.S. and China, remain a risk. 

Protracted weakness could trigger crises in some economies, the ADB said. 

Aug 26, 2020

News | Asia | North Korea: Kim Jong-un warns over typhoon and coronavirus

4-5 minutes - Source: BBC



Kim Jong-un chairs a meeting on 25 Aug Image copyright Reuters
Image caption Kim's appearance contradicts recent rumours that he was gravely ill
Kim Jong-un has warned North Korean authorities to prepare for the dangers posed to the country by the coronavirus pandemic and a looming typhoon.
Mr Kim's appearance at a party meeting comes after widespread speculation over his health.
North Korea has not confirmed any Covid-19 cases and it is thought that a large outbreak would have a devastating effect on the impoverished nation.
Meanwhile Typhoon Bavi is expected to hit North Korea later this week.
Speaking at a meeting of the politburo on Tuesday, Mr Kim, who was smoking a cigarette, said there were "some shortcomings" in the state's efforts to keep out the "malignant virus", state media reported, without giving details.
Pyongyang for a long time insisted said were no infections in the country, though this was doubted by observers. No cases have been declared, but its media have not repeated the claim for several weeks now.
After a suspected case, there had been a lockdown in one border city near South Korea but the infection was never officially confirmed.
Kim Jong-un's appearance came amid rumours about his health and that he had delegated some of his authority to his sister Kim Yo-jong.
Speculation about the health of the North Korean leader is not unusual but has so far always turned out to be false.
While the world's tabloids obsess over Kim Jong-un - who is clearly fine - there are bigger concerns. The state and its 25 million people are clearly not fine.
Typhoon Bavi could cause damage in a country already reeling from one of the longest monsoon seasons on record. Torrential rain in August brought widespread flooding.
And now the BBC's weather centre is predicting storm surges of between 200-300mm of rain just weeks before the autumn rice harvest.
Ten million people are said to suffer from food insecurity in North Korea, according the UN. That means they live from harvest to harvest. They cannot afford more crops to be damaged.
North Korea has also gone from insisting it had zero cases of Covid-19 to holding yet another high level meeting to discuss ways to mitigate the effects of the virus.
We still don't know if outbreaks are under control in the secretive state, which closed its borders to the world in January.
Just last week, Mr Kim admitted that his big economic plan, which was due to come to fruition in 2020, had failed and he was having to come up with a new one. A rare admission from a North Korean leader that he has come up short.
Trade with China, the nation's biggest benefactor and ally, was down over 20% in July, according to Chinese customs data. Border closures to prevent coronavirus entering the country have had an impact on the vital supply chain.
NK News has also reported that foreign embassy staff and the majority of NGO's in the country have left due to the severe virus restrictions.
2020 has been a bad year for most of the world. But for North Korea it has the potential to be devastating and there are very few organisations available in the country to notice and help.

Aug 17, 2020

News | Business | Asia | China: China and trade: Breaking up is hard to do

By Karishma Vaswani 



Woman works at medal-maker Royal Insignia Image copyright Royal Insignia
There's an old adage in Asian business circles: when China sneezes, Asia catches a cold. So imagine what happens during a pandemic.
When China locked down, supply chains around the region were hit and companies couldn't get access to raw materials and products.
Nothing escaped the reach of the coronavirus crisis, not even the tiniest artefact, as speciality crafts studio Royal Insignia found out.
For decades, the fine craft studio has made medals and jewellery for the who's who in South East Asian royalty.
But coronavirus closed down borders and that meant the company couldn't meet customer orders.
Royal Insignia sources its precious metals from Italy and its gift boxes from China.
General manager Lin Yiqun says it was a double whammy - lockdowns in both countries meant the company couldn't get any of its supplies.
"The important lesson for us to learn here was you need to have an alternate source for supply chains," he said.

"If this thing is going to hit us again, how do we respond to that? For packaging materials, we definitely are looking at other suppliers."
Although Royal Insignia has invested in automation, most of its precious products are made painstakingly by hand.
It only keeps just the right amount of raw materials for production, meaning it didn't have extra stock lying around.

Wake-up call

For Royal Insignia and other companies around the world, the pandemic caused a massive disruption in global trade. It was a huge wake-up call.
It taught them a valuable lesson that depending on one country all the time for everything is bad for business.
That lesson is starting to have a real-world impact.
A recent survey by supply chain management firm QIMA showed that 95% of US companies questioned said they would diversify suppliers both in and out of China.
But even with the pandemic and the continuing trade war between the US and China, a complete break is tough.
Some 87% of the companies surveyed still said the mainland is one of their top three sourcing destinations.
It is not just US firms having that realisation, and neither is it just because of how deep the supply chains are in China.
"China responded to the virus in a different manner to how other countries responded," said Steven Lynch, chief executive of the British Chamber of Commerce in China."The one thing they did was reassure and gave businesses confidence to reopen."

He said: "Companies who have supply chains and manufacturing operations here, [China] very quickly gave tax incentives and support to businesses to reassure them of their investments."
Meanwhile, China's appetite for high-tech goods is growing when other countries are cutting back.
For Taiwanese firm Advantech, which makes industrial computers, China makes up almost a quarter of its business.
Advantech founder Chaney Ho said China was its second-biggest market: "From a business point of view, we cannot just give up this market."
He said: "China is still doing a lot of infrastructural expansion for 5G and high-speed train subway infrastructure. It requires a lot of industrial computers.
"This is not just good for Advantech, but also for a lot of other European companies too."
China has gone from being the world's supplier to also becoming one of the world's most important customers.
It's the only economy that's likely to grow this year.
Global trade has been defined by China in the last few decades - and that's not going to change any time soon.

News | Business | Asia | Japan: Japan suffers its biggest economic slump on record

4-5 minutes - Source:BBC




Early morning commuters in Tokyo. Image copyright Getty Images
The Japanese economy has shrunk at its fastest rate on record as it battles the coronavirus pandemic.
The world’s third largest economy saw gross domestic product fall 7.8% in April-June from the previous quarter, or 27.8% on an annualised basis.
Japan was already struggling with low economic growth before the crisis.
The figures released on Monday are a stark reminder of the severe financial impact faced by countries around the world.
Japan slipped into recession earlier this year following two successive quarters of economic contraction.
Its latest data for the April to June quarter was the biggest decline since comparable figures became available in 1980 and was slightly bigger than analysts had expected.


Media playback is unsupported on your device
Media captionWhat is a recession?
One of the main factors behind the slump was a severe decrease in domestic consumption, which accounts for more than half of Japan's economy. Exports have also fallen sharply as global trade is hit by the pandemic.
The latest data is the third successive quarter of declines for the Japanese economy, representing its worst performance since 1955.
The downturn puts further pressure on a Japanese economy that was already struggling with the effects of a sales tax hike to 10% last year, along with typhoon Hagibis.


After the slump, hopes of a bounce


Japan is the latest in a string of Asian economies to report drastically lower second quarter GDP data.
That shouldn't be a surprise: no one escaped the reach of the pandemic, and even if there weren't strict lockdowns put in place, people generally stayed indoors and didn't spend money.
That has a knock-on effect on corporate earnings, as consumers buy less and so companies earn less.
It's a vicious cycle that in turn leads to a lack of confidence about hiring prospects - which means there's also nervousness about job prospects. All of that is showing up in the numbers today.
Still, now is the time to look to the future and to the possibility of a rebound.
Japan is likely to do better than other economies according to some analysts. Capital Economics says even though the world's third largest economy is in the midst of a second wave of infections, its health care systems aren't overwhelmed, and new cases have started to decline. The research house says it expects to see third quarter GDP bounce back - and continue through to next year.


Ray of light

After the record contraction most analysts expect Japan's economic growth to rebound in the coming months.
Prime Minister Shinzo Abe has introduced massive stimulus packages aimed to help cushion the blow of the pandemic.
While Japan lifted state of emergency measures in late May, concerns remain that a recent spike in infections may again hit business and household spending.
China, the world’s second biggest economy, also offers some cause for hope. Its economy rebounded in the April to June period, with growth of 3.2%.

Jun 24, 2020

News | Asia | Business | Advertising: Tencent falls from fresh record high as it battles Alibaba for title of Asia's biggest company

Eustance Huang, Arjun Kharpal




People visit the Tencent stand during the 1st Digital China Summit at Strait International Conference and Exhibition Center on Apr. 22, 2018 in Fuzhou, China.
People visit the Tencent stand during the 1st Digital China Summit at Strait International Conference and Exhibition Center on Apr. 22, 2018 in Fuzhou, China.
VCG | Getty Images

Chinese internet behemoth Tencent’s stock briefly hit new records on Wednesday, bringing it into a tight race with rival Alibaba for the title of Asia’s biggest company by market cap.
In early trade on Wednesday, shares of Tencent soared past 500 Hong Kong dollars per share, surpassing its previous record high of 498.60 Hong Kong dollars set on Tuesday. However, it later lost those gains and closed 1.33% lower. Meanwhile, Hong Kong-listed shares of Alibaba edged 0.64% higher.
At the intraday highs of their respective Hong Kong-listed shares, both Tencent and Alibaba’s market cap stood at 4.82 trillion Hong Kong dollars (approx. $621.92 billion). That’s according to CNBC calculations, multiplying the stock price by number of shares outstanding.

Strength in Tencent’s advertising business

Still, Tencent could see further gains. On Tuesday, analysts at Bernstein raised their target price to 570 Hong Kong dollars per share, representing upside of almost 13% from the stock’s Wednesday high. Meanwhile, Nomura’s price target is 531 Hong Kong dollars per share, implying about 5% upside.
“Recent meetings have given comfort to investors that Tencent’s advertising business is performing stronger than expected,” Neil Campling, Mirabaud Securities’ head of technology, media and telecommunications, told CNBC in an email on Tuesday.
“We think there were many who thought ByteDance would steal market share away from Tencent and that simply isn’t happening,” he said, referring to the Chinese tech unicorn behind the immensely popular social media platform TikTok.
“It is possible for there to be two big digital ad companies in China (just like Facebook and Google co-dominate in the West) and Tencent’s digital economy of scale is difficult to replicate or overthrow,” Campling said.
Bernstein analysts cited a “more optimistic view on advertising as well as gaming” in their note announcing their increased target price. They said, “We don’t think the upside for (Tencent’s) core business is factored in yet.”
“We believe Tencent has reached a tipping point in advertising as its technology improved while ByteDance’s growth slows down, allowing Tencent to take further market share going forward,” the analysts said. “We raise Tencent advertising revenue growth this year to 29% YoY (up from 18% before). In the next 3 years, we see 24% advertising growth (compound annual growth rate) as Tencent gains further market share.”
Nomura analysts were similarly upbeat in a recent note: “We believe Tencent’s ads should fare better than most of its peers as the WeChat platform is highly valued by advertisers.”

WeChat economy potential

Mirabaud Securities’ Campling also pointed to Tencent’s move to “accelerate” the economy on its WeChat platform, China’s most popular messaging app.
Often described as a “super app,” WeChat integrates multiple functions, making it a one-stop shop for users. Companies may decide to launch mini-programs, or apps within WeChat itself, instead of having a standalone app.
A recent soft launch of the “WeChat Mini Store” could offer a viable alternative to Alibaba for small and medium businesses, Campling said. Citing industry players, he added that users of the Mini Store may be able to sell their products through live broadcast. This offers “massive social eCommerce potential” for Tencent, Campling said.

Jun 15, 2020

News | Asia | Politics | North Korea: North Korea is frustrated at its 'failed diplomacy' with the U.S. and South Korea, says expert

Huileng Tan



North Korea’s recent proclamations of aggression could be a sign of frustration at what it views as “failed diplomacy,” said an expert on Monday.
On Saturday, North Korea issued a warning of retaliatory military measures against South Korea.
“By exercising my power authorized by the Supreme Leader, our Party and the state, I gave an instruction to the ... department in charge of the affairs with (the) enemy to decisively carry out the next action,” said Kim Yo Jong, who serves unofficially as one of North Korean leader Kim Jong Un’s top aides, according to a statement carried by state news agency KCNA obtained by NBC News. Kim Yo Jong is the younger sister of Kim Jong Un.
Pyongyang has been angered by defectors who have been sending rice and anti-North propaganda leaflets — typically via balloons or in bottles by sea.
The balloons and rice have been standing issues between the two countries, but the context in which Pyongyang is now operating in is quite different, so the recent developments need to be seen in a “broader context of frustration,” said John Park, director of the Korea Project at the Harvard Kennedy School.
“We’re in the long shadow of what the North Koreans view to be failed diplomacy at the leader-to-leader level,” said Park.
Pyongyang is moving in a different direction because the North Koreans feel they have been let down by the U.S. and South Korea. And it comes two years after the historic summit in Singapore in June 2018, between Kim and U.S. President Donald Trump, said Park.
There has been little progress since, and a second round of talks ended abruptly in the Vietnamese capital of Hanoi when both sides could not agree on the removal of sanctions.
Students and youths attend a mass gathering denouncing ‘defectors from the north’, at the Pyongyang Youth Park Open-Air Theatre, in Pyongyang on June 6, 2020.
Kim Won Jin | AFP | Getty Images
On Saturday, the younger Kim also threatened the destruction of a joint liaison office at the Kaesong industrial zone, “invoking the authority of her brother to order the military of North Korea to prepare for possible military action against what we believe to be the inter-Korean liaison office,” noted Park.
“Certainly it would be high in symbolism but the message would be very clear to South Korea — that all of the progress from the inter-Korean agreement would be gone from the eyes of North Korean side,” said Park.
Kim met South Korean President Moon Jae-in at least three times in 2018, ushering hope of warming ties and possible reconciliation between the two. Both countries are currently still technically at war since the 1950-1953 Korean War ended in a ceasefire, instead of a peace treaty.
Moon’s administration has sought to discourage the leaflet and rice campaigns, Reuters reported.
The fact that the North Korean leader’s younger sister is issuing statements lends credence to her role.
“We’re seeing a lot of big statements coming out of Kim Yo Jong,” said Park. This indicates that her role is not just ceremonial and that she has been “chronically underestimated,” he added.
“I think what we’re seeing now is essentially a reflection of a partnership that she has with her brother,” said Park. “It looks like there is this kind of power partnership between the two that became more visible.”
The younger Kim playing a larger role in the public domain comes as concerns brew over the health of the elder Kim, who disappeared from public view at one point of time fueling concerns he was ill. He eventually emerged again, after week of speculation over his health.

Jun 9, 2020

News | Asia | Politics | North Korea: North Korea halts all communications with South

5-6 minutos - Source: BBC




North Korean students take part in a rally denouncing "defectors from the North" as they march from the Pyongyang Youth Park Open-Air Theatre to Kim Il Sung Square in Pyongyang on June 8, 2020 Image copyright AFP
Image caption North Korean students held a rally to denounce defectors on Monday
North Korea has said it will cut off all inter-Korean communication lines with the South, including a hotline between the two nations' leaders.
The North said this was the first in a series of actions, describing South Korea as "the enemy".
Daily calls, which have been made to a liaison office located in the North Korean border city of Kaesong, will cease from Tuesday.
The two states had set up the office to reduce tensions after talks in 2018.
North and South Korea are technically still at war because no peace agreement was reached when the Korean War ended in 1953.
North Korea "will completely cut off and shut down the liaison line between the authorities of the North and the South, which has been maintained through the North-South joint liaison office... from 12:00 on 9 June 2020," the Korean Central News Agency (KCNA) report said.
Military communication channels will also be cut, North Korea said.
When the liaison office was temporarily closed in January because of Covid-19 restrictions, contact between the two states was maintained by phone.
The two Koreas made two phone calls a day through the office, at 09:00 and 17:00. On Monday, the South said that for the first time in 21 months, its morning call had gone unanswered, although contact was made in the afternoon.
"We have reached a conclusion that there is no need to sit face-to-face with the south Korean authorities and there is no issue to discuss with them, as they have only aroused our dismay," KNCA said.
Kim Yo-jong, the North Korean leader's sister, threatened last week to close the office unless South Korea stopped defector groups from sending leaflets into the North.
She said the leaflet campaign was a hostile act that violated the peace agreements made during the 2018 Panmunjom summit between the South's Moon Jae-in and Kim Jong-un.

It's likely that this shut down isn't just about sending leaflets over the border - but instead, all part of a grander plan by Pyongyang.
North Korea may be creating a crisis in order to use the tension as leverage in later talks. In short, it could be simply spoiling for a fight to get attention and ask for more from its neighbour.
They've played this particular game before in 2013 to try to win more concessions from South Korea.
It's also a good distraction domestically. Kim Jong-un is failing to deliver the economic prosperity he keeps promising and rumours continue to circulate that Covid-19 is affecting parts of the country. Giving the nation a common enemy helps rally his people back around a cause.
It's worth noting one of the two signatures on this policy. Kim's sister, Kim Yo-Jong gave the order to sever ties with Seoul. This gives her a platform and the spotlight and will fuel more speculation that she is being groomed as a potential leader.
But how disappointing this must be for the Moon administration. Two years ago in a wave of optimism, the country cheered as the two leaders met and agreed to keep the phone lines open. Now all calls to the North are not being picked up.
And the question is, if this is just the start of Pyongyang's plan, what comes next?

North Korean defectors occasionally send balloons carrying leaflets critical of the communist region into the North, sometimes with supplies to entice North Koreans to pick them up.
North Koreans can only get news from state-controlled media, and most do not have access to the internet.
Ties between the North and South appeared to improve in 2018, when the leaders of both countries met three times. Such high-level meetings had not taken place in over a decade.
But Pyongyang largely cut off contact with Seoul following the collapse of a summit between Kim and US president Donald Trump in Hanoi last year that left nuclear talks at a standstill.
The two Koreas remain technically at war because the 1950-1953 Korean war ended with an armistice rather than a peace treaty.

Jun 1, 2020

News | Asia | Economy: Hong Kong finance secretary says no plans to change U.S. dollar peg

1minute - Source: CNBC




Standard Chartered headquarters and a HSBC building are pictured on March 16, 2020 in Hong Kong.
Standard Chartered headquarters and a HSBC building are pictured on March 16, 2020 in Hong Kong.
Zhang Wei | China News Service via Getty Images

Hong Kong had no plans to change its currency’s peg to the U.S. dollar and the Asian financial hub has not seen any “obvious” capital outflows after Washington moved to strip the city of its special status in U.S. law, the city’s finance secretary said.

Paul Chan said on Monday that authorities were confident in defending the Hong Kong dollar exchange rate, with foreign exchange reserves twice the size of the entire monetary base and liquidity in the banking system “very healthy and strong”.
Chan added capital will continue to flow freely in and out of Hong Kong.

May 27, 2020

News | Asia | China | Yuan Exchange Rate Expectations: Barings sees opportunities in the Chinese yuan and the country's 10-year bond

Eustance Huang




A Chinese clerk counts renminbi yuan banknotes at a bank in China on December 2015.
A Chinese clerk counts renminbi yuan banknotes at a bank in China on December 2015.
Jie Zhao | Corbis News | Getty Images

The Chinese yuan has weakened considerably in recent days, as U.S.-China tensions reignite and investors weigh the uncertainty over Beijing’s proposed a new national security law for Hong Kong.
There is “value” for the Chinese currency at these current levels, according to Barings’ Head of Greater China Investments, Khiem Do.
“For the next 12 months, we believe that the yuan will trade somewhere between 6.8 against the U.S. dollar to 7.2,” Do told CNBC’s “Street Signs” on Wednesday.
The onshore yuan — which trades in the mainland and is tightly controlled by China — traded at 7.1579 per dollar on Wednesday afternoon Singapore time.
On Monday, the People’s Bank of China said the official yuan midpoint at its weakest since the 2008 global financial crisis, according to Reuters. Every morning, the Chinese central bank sets a so-called daily midpoint fix which the currency is then allowed to trade within a 2% band above or below.
The yuan’s offshore counterpart, which trades more freely that the onshore currency, changed hands at 7.1737 against the dollar. Earlier on, it had weakened to 7.1755 per dollar — its weakest level since Sept. 4, 2019 — according to Reuters.

‘Good value’ in China’s 10-year bond

In addition to finding investing opportunities in the yuan, Do also said there’s value in the current Chinese 10-year bond rate.
As of Wednesday afternoon Singapore time, the yield on the Chinese 10-year bond stood at 2.707%.
Yields around those levels represent more value compared to other bond markets elsewhere, Do said.
“The Chinese 10-year bond rate at about 2.6 (percent) or thereabout actually presents a lot more value relative to the … other OECD bond markets,” he said referring to countries in the Organization for Economic Cooperation and Development.
We think that actually the Chinese 10-year government bond rate, at about 2.7%, is very good value,
Khiem Do
Head of Greater China Investments, Barings
“If you look at the U.S. bond market, it’s trading at about 0.7%,” he said, referring to the yield on the benchmark U.S. 10-year Treasury note, which was last at 0.6916%. “If you look across ... Europe, it’s mostly negative.”
“We think that actually the Chinese 10-year government bond rate, at about 2.7%, is very good value,” Do said.

Apr 28, 2020

Asia News: Sister or spymaster: Who might lead N Korea without Kim?

bbc.com

10-13 minutes - Source: BBC


North Korea's leader Kim Jong Un before a meeting with US President Donald Trump on the south side of the Military Demarcation Line that divides North and South Korea, in the Joint Security Area (JSA) of Panmunjom in the Demilitarized zone (DMZ) on June 30, 2019. Image copyright BRENDAN SMIALOWSKI
Image caption Kim Jong-un has not been seen in public for more than two weeks
Speculation and rumour about Kim Jong-un's health may amount to nothing, but questions about who might succeed him in the short or long term will always be there. The BBC spoke to analysts about the contenders and whether history is on their side.
A male member of the Kim family has been in charge of North Korea ever since its founding by Kim Il-sung in 1948 - and the mythology of this family runs deep throughout society.
Propaganda about its greatness begins for citizens before they can even read: pre-schoolers sing a song called: "I want to see our leader Kim Jong-un."
So how can you imagine a North Korea without this symbolic and political figure at the top? How would elites organise themselves, as well as society as a whole?
The easy answer is: we don't know. More interestingly, they don't know either. They have never had to do it.
Presentational grey line

There has always been a Kim...


As Kim Jong-un was being prepared for power, they even began using the term "Paektu Bloodline" to help legitimise his rule. Paektu is the sacred and mythologised mountain where Kim Il-sung is said to have waged guerrilla war and where Kim Jong-il was reportedly born. Kim Jong-un still goes there when he wants to emphasise important policy decisions.
There has always been a Kim at the ideological heart of the country.
What would North Korea be like without such an heir? Kim Jong-un is believed to have children - but they are far too young. It is thought he has three children, the oldest being 10 and the youngest three. Kim Jong-un himself was considered young when he took power - he was 27.
It is likely that some sort of group leadership would emerge, perhaps as in Vietnam, that leans heavily on the founder's teachings and legitimacy to boost their own standing.
Observers can track who holds certain key positions and can follow news and open-source intelligence about important institutions, but can't really tell how factions are developing, nor who is holding power through personal rather than institutional bonds. Moreover, sometimes vice or deputy directors wield more real power than the titular heads of institutions. This makes all predictions extremely difficult.

The three remaining Kims


The are three Kims who could potentially be involved in the political make-up of North Korea if Kim Jong-un were to disappear. They all face limitations in carrying on family rule.
The first is Kim Yo-jong, Kim Jong-un's younger sister. She is said to have been a favourite of her father who commented on her precocity, her interest in politics from a young age. Her manner is efficient, mild and one suspects rather observant. Much has been made of her closeness to her brother. At the Singapore Trump-Kim summit she was famously on hand to pass him a pen to sign the agreement with, and at the next summit in Hanoi, was pictured peeking out from behind corners as her brother posed for statesman-like photos.
Yet she was not above a temporary demotion after the Hanoi summit - purportedly because of its failure although this will never be confirmed. She doesn't sit on the top policy-making body, the State Affairs Commission, but is an alternate member of the Politburo and vice director of the Propaganda and Agitation Department (PAD) of the Workers' Party of Korea. These may seem like incomprehensible acronyms but the PAD is a powerful organisation that ensures ideological loyalty in the system.
She is a woman, however, and this makes it hard to imagine her occupying the top position in such a deeply patriarchal country. North Korea is an extremely male state, in which gender carries rigid expectations. Being supreme leader, and certainly running the military, does not fit in the range of womanly duties.
The second is Kim Jong-chul. He is Kim Jong-un's older brother, but has never appeared interested in politics or power. (He is known to be interested in Eric Clapton.) At most, he could be a symbolic link to the Kim family: perhaps made the head of a foundation and put forward to read the odd speech.
The final one is Kim Pyong-il, Kim Jong-il's half-brother. His mother - Kim Jong-il's stepmother - was angling to have him become Kim Il-sung's successor. She failed and was sidelined by Kim Jong-il as he rose in influence. Kim Pyong-il was sent to Europe in 1979, where he has held various ambassadorships, returning to North Korea only last year. This means it is very unlikely he has the network to be a central player in elite politics in Pyongyang.

The second-most powerful man in North Korea right now


There are other individuals who have been central in the Kim Jong-un era, but it is difficult to know who among them would form co-operative relationships and who would compete with one another.
One is Choe Ryong-hae. He has had his ups and downs under Kim Jong-un, but having weathered a few storms currently sits on the presidium of the politburo and is also first vice chairman of the State Affairs Commission. Last year he became the first new president in 20 years, replacing the aging Kim Yong-nam - so he is the person who represents the North at international engagements.
Choe has also held high positions in the military and the Organization and Guidance Department (OGD) of the Worker's Party of Korea, responsible for enforcing loyalty throughout the regime. This is an extremely powerful organisation: it enforces the adherence of all citizens to North Korea's ideology. He is probably the second most powerful man in North Korea.

The old spymasters and rising political grandees


Another is Kim Yong-chol. This general paved the way for the Trump-Kim summits, meeting US Secretary of State Mike Pompeo several times. He has been head of the United Front Department (responsible for relations with South Korea) and the Reconnaissance General Bureau, the country's main intelligence service. He seems to have suffered a demotion following the collapse talks with the United States, but it is unlikely this spymaster will remain obscure for long.
Yet another is Kim Jae-ryong. As well as being on the State Affairs Commission, he is Premier of the Cabinet, a moderately influential position. Relatively little is known about him, but his star has risen in the past years as others have fallen. He is known for managing industries and ran the most isolated province, home to key military-industrial sites, for several years. This may mean he has been closely involved in the nuclear program.
Jong Kyong-taek is responsible for the State Security Department, which investigates and punishes political crimes. It also helps physically protect the leadership. These are crucial responsibilities that help enforce stability in the system.
Hwang Pyong-so is another official who has held top military posts and has run the OGD in the Kim Jong-un era. Like Choe (and many others) he has been disciplined; he doesn't seem to have been rehabilitated in the same way, however. Other 2010s foreign policy stalwarts Ri Yong-ho and Ri Su-yong have also seen roles diminish recently. They have been replaced by Ri Son-gwon and Kim Hyung-jun. The former is said to be an ally of Kim Yong-chol.

The military enforcers

A handful of top generals of the Korean People's Army (KPA) would also certainly exert influence in any transition period. Currently, two men sit atop the General Political Bureau of the KPA, Kim Su-gil and Kim Won-hong. This bureau enforces political loyalty in the military, something that would be absolutely crucial during periods of uncertainty.
Kim Won-hong, helps illustrate how difficult it is to predict how power would be shared if Kim Jong-un were no longer there. Kim Won-hong and Hwang Pyong-so had been thought to be rivals, competing to influence Kim Jong-un at the other's expense.
Amongst top elites, who would clash and who would ally? Would there be pro and anti-Kim Yo-jong factions? Would the fear of instability stop rivalries from getting out of hand? After all, it is in no elite politician's interest to see the state collapse, opening the door for some kind of takeover by South Korea, or even China.
There is currently no perfect contender: his sister would have to overcome the sexism and the break from tradition of a male heir. Anybody else is not directly descended from that all-important Paektu bloodline. but in the end, they will all have to think of the unity of the state they have defied every international norm to preserve. 

Sep 23, 2019

Asia | Asia Markets Closing Report: Asia shares mostly down as investors watch US-China trade developments

Eustance Huang



Shares in Asia were mostly lower on Monday as investors watched for developments on the U.S.-China trade front
Mainland Chinese shares declined on the day, with the Shanghai composite falling 0.98% to about 2,977.08 and the Shenzhen composite down 0.912% to approximately 1,660.06.
Hong Kong’s Hang Seng index shed 0.57%, as of its final hour of trading. Shares of companies related to China’s Fosun saw declines, following the collapse of the world’s oldest travel firm Thomas Cook — the Chinese conglomerate is the largest shareholder in the British firm. Fosun Tourism dropped 4.36% and Fosun International declined 1.34%.
South Korea’s Kospi finished largely flat at 2,091.70, while the S&P/ASX 200 in Australia closed 0.28% higher at 6,749.70.
Over in India, shares bucked the overall downward trend regionally as the Nifty 50 and S&P BSE Sensex both jumped more than 3% each, adding to large gains seen last Friday after a surprise tax cut was announced.
Overall, the MSCI Asia ex-Japan index shed 0.15%.
Markets in Japan were closed on Monday for a holiday.

Asia-Pacific Market Indexes Chart

TICKER COMPANY NAME PRICE CHANGE %CHANGE
NIKKEINikkei 225 IndexNIKKEI22079.0934.640.16
HSIHang Seng IndexHSI26222.40-213.27-0.81
ASX 200S&P/ASX 200ASX 2006749.7018.900.28
SHANGHAIShanghaiSHANGHAI2977.08-29.37-0.98
KOSPIKOSPI IndexKOSPI2091.700.180.01
CNBC 100CNBC 100 ASIA IDXCNBC 1008032.14-6.06-0.08

US-China trade

On the trade front, China’s Ministry of Commerce said over the weekend that economic and trade teams from the two economic powerhouses held “constructive” discussions in Washington late last week. They added that both the U.S. and China agreed to maintain in contact.
Shares stateside had slipped last Friday after the Chinese delegation canceled a visit to U.S. farms in Montana and Beijing officials headed back to China earlier than planned, dampening expectations of a trade deal being reached.
“The starting point is they’re not on the same page, the collateral damage is going to be far more pernicious because even if China is implicated it’s not just China that’s implicated,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, told CNBC’s “Squawk Box” on Monday. “I don’t think anyone is winning the trade war.”

Oil prices jump

Oil prices jumped in the afternoon of Asian trading hours, with international benchmark Brent crude futures gaining 0.84% to $64.82 per barrel and U.S. crude futures jumping 0.96% to $58.65 per barrel.
Shares of oil companies regionally, however, were mixed. Australia’s Beach Energy jumped 1.95% and Santos gained 0.64%, while South Korea’s S-Oil rose 0.49%. Hong Kong-listed shares of China’s CNOOC, on the other hand, slipped 0.95% as of their final hour of trading.
The moves in crude prices came after reports surrounding Saudi Arabian state oil firm Aramco, which recently saw attacks at major facilities. The Wall Street Journal reported Sunday that repairs at Aramco could take months longer than the firm expects, citing Saudi officials and contractors.
That came following a Nikkei Asian Review report that Aramco told Japanese refiner JXTG about a potential change in shipments, raising questions over the kingdom’s ability to supply crude.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 98.536 after seeing an earlier low of 98.446.
The Japanese yen traded at 107.74 against the dollar after seeing lows above 108.3 in the previous trading week. The Australian dollar changed hands at $0.6772 after declining from levels above $0.685 last week.
— CNBC’s Fred Imbert contributed to this report.

Sep 19, 2019

Asia | Asia Markets Closing Report: Asia stocks mostly higher as Fed cuts rate; Bank of Japan keeps monetary policy steady

Eustance Huang



Stocks in Asia were mostly higher on Thursday after the U.S. Federal Reserve cut interest rates overnight — but the U.S. central bank appeared divided on its next course of action for the year.
Mainland Chinese stocks were up on the day, with the Shanghai composite higher by 0.46% at about 2,999.28 and the Shenzhen component gaining 1.01% to 9,852.20. The Shenzhen composite added 1.028% to approximately 1,672.63.
Hong Kong’s Hang Seng index, however, fell 1.07% to close at about 26,468.95. Shares of life insurer AIA dropped 3.04%.
In Japan, the Nikkei 225 rose 0.38% to close at 22,044.45 while the Topix index added 0.56% to end its trading day at 1,615.66. Over in South Korea, the Kospi closed 0.46% higher at 2,080.35 as shares of Samsung Electronics surged 3.04%.
Australia’s S&P/ASX 200 also rose 0.54% to finish its trading day at 6,717.50. Data released by the Australian Bureau of Statistics showed the country’s trend unemployment rate increased to 5.3% in August.
Following the employment data release, the Australian dollar traded at about $0.6787 after seeing highs above $0.684 in the previous session.
Overall, the MSCI Asia ex-Japan index shed 0.51%.

TICKER COMPANY NAME PRICE CHANGE %CHANGE
NIKKEINikkei 225 IndexNIKKEI22044.4583.740.38
HSIHang Seng IndexHSI26468.95-285.17-1.07
ASX 200S&P/ASX 200ASX 2006717.5035.900.54
SHANGHAIShanghaiSHANGHAI2999.2813.620.46
KOSPIKOSPI IndexKOSPI2080.359.620.46
CNBC 100CNBC 100 ASIA IDXCNBC 1008010.76-15.80-0.20

Central bank watch

The moves regionally on Thursday came as investors reacted to a series of recent moves by central banks across the globe.
The Fed cut its benchmark overnight rate by 25 basis points to a range of 1.75% to 2%, a move that was widely expected. It is the second time this year the central bank has lowered rates.
The Fed was, however, divided in its decision to lower rates, with three officials dissenting. Central bank officials are also split on further action this year. Five Fed members wanted to keep rates unchanged while five others supported lowering them to the current range and keeping them there. Seven others wanted at least one more rate cut.
The September Federal Open Market Committee (FOMC) statement, members’ votes and the updated policy rate projection reflect a “significant divergence” in view among the FOMC members, J.P. Morgan Asset Management Asia Chief Market Strategist Tai Hui wrote in a note. “This reflects the uncertain nature of the U.S. economic outlook.”
“We still believe risk is skewed to more rate cuts before the end of 2019, as part of the “insurance cut,”″ he said. “The progress of the US-China trade negotiation remains slow and this will continue to weigh on business sentiment. One important question is whether this cautious mood would eventually spillover into hiring decisions or slowdown wage growth.”
The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 98.453 after touching an earlier high of 98.623.
Following the Fed decision, the Hong Kong Monetary Authority announced Thursday it adjusted its base rate downward by 25 basis points to 2.25%.
The Bank of Japan (BoJ) kept monetary policy steady on Thursday. In an expected move, the BoJ maintained its short-term interest rate target at -0.1% and a pledge to guide 10-year government bond yields around 0%.
In its statement on monetary policy, the Japanese bank said “it is becoming necessary to pay closer attention to the possibility that the momentum toward achieving the price stability target will be lost,” in reference to the BoJ’s ever elusive 2% inflation target.
“The Bank will reexamine economic and price developments at the next (Monetary Policy Meeting), when it updates the outlook for economic activity and prices,” the BoJ said.
Following that decision, the Japanese yen traded at 108.06 against the dollar after seeing an earlier low of 108.46.
Oil prices rose in the afternoon of Asian trading hours, with international benchmark Brent crude futures up 0.63% to $64.01 per barrel and U.S. crude futures gaining 0.33% to $58.3 per barrel.
— Reuters, along with CNBC’s Fred Imbert, contributed to this report.

Sep 18, 2019

Asia I Asia Markets Closing Report: Asia Pacific stocks mixed as investors await Fed interest rate decision

Eustance Huang



Stocks in Asia Pacific were mixed on Wednesday as investors awaited the U.S. Federal Reserve’s interest rate decision, set to be released later stateside.
In mainland China, shares were up on the day, as the Shanghai composite gained 0.25% to approximately 2,985.66 and the Shenzhen component added 0.31% to 9,753.31. The Shenzhen composite also rose 0.258% to about 1,655.61.
Hong Kong’s Hang Seng index was fractionally higher, as of its final hour of trading.
Anheuser-Busch InBev began taking orders in its second attempt to spin off its Asian business in Hong Kong on Wednesday, aiming to raise up to $6.6 billion in its Budweiser listing — what could be the world’s second largest IPO this year. Budweiser APAC is set to price the IPO Sept. 23, and the stock will debut on Sept. 30, the company said in a statement.
The brewing giant said on Tuesday it would offer 1.3 billion shares at between HK$27 and HK$30 ($3.45 to $3.83) apiece.
Elsewhere, the Nikkei 225 in Japan slipped 0.18% on the day to 21,960.71 while the Topix fell 0.49% to close at 1,606.62. Data showed Wednesday that Japan’s exports fell 8.2% year-on-year in August, less than expectations of a 10.9% decrease by economists in a Reuters poll.
South Korea’s Kospi ended its trading day 0.41% higher at 2,070.73. Over in Australia, the S&P/ASX 200 slipped 0.2% to close at 6,681.60. Australian-listed shares of adventure goods retailer Kathmandu jumped 7.6% after the company reported a more than 13% year-on-year jump in its net profit after tax.
Overall, the MSCI Asia ex-Japan index was up 0.15%.

Fed decision awaited

Investors awaited the Fed’s latest decision on monetary policy, set to be released on Wednesday stateside. The U.S. central bank is widely expected to cut rates by 25 basis points. That would be its second rate cut of 2019.
Fed Chair Jerome Powell will likely say that the cut in interest rates is a “mid-cycle correction” and not the “first of a series of cuts,” Hugh Johnson, chairman and chief investment officer at Hugh Johnson Advisors, told CNBC’s “Street Signs” on Wednesday.
“What’s important is that the markets are now pricing in not three cuts as they once were, that was three weeks ago. Now they’re pricing in that there’ll probably be this cut and maybe one more, and it might be December, it might be March of 2020,” he said.

TICKER COMPANY NAME PRICE CHANGE %CHANGE
NIKKEINikkei 225 IndexNIKKEI21960.71-40.61-0.18
HSIHang Seng IndexHSI26754.12-36.12-0.13
ASX 200S&P/ASX 200ASX 2006681.60-13.70-0.20
SHANGHAIShanghaiSHANGHAI2985.667.540.25
KOSPIKOSPI IndexKOSPI2070.738.400.41
CNBC 100CNBC 100 ASIA IDXCNBC 1008023.94-7.81-0.10

Oil watch

Stocks of oil companies in the region mostly slipped on Wednesday, following a sharp drop in crude prices overnight after Saudi Arabia signaled its oil supply could return to normal soon. That came after a historic rise in oil prices following a series of drone attacks over the weekend on the kingdom’s oil industry that disrupted its crude production.
In Australia, Santos slipped 1.66% and Woodside Petroleum declined 2.52% while Beach Energy added 0.75%. Japan’s Inpex plunged 4.22% and South Korea’s S-Oil shed 0.99%. Hong Kong-listed shares of Petrochina and CNOOC also dropped 1.86% and 1.24%, respectively, as of their final hour of trading.
In the afternoon of Asian trading hours, oil prices were mixed. International benchmark Brent crude futures were up 0.28% to $64.73 per barrel, while U.S. crude futures fell slightly to $59.31 per barrel.
The moves regionally came after Saudi energy minister Prince Abdulaziz bin Salman said in a press conference Tuesday that oil production capabilities were fully restored and that oil output will be back to pre-attack levels by the end of September.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 98.348 after declining from levels above 98.4 yesterday.
The Japanese yen traded at 108.20 against the dollar after weakening from levels below 108.0 seen earlier in the trading week. The Australian dollar changed hands at $0.6842 after touching an earlier high of $0.6869.
— Reuters, along with CNBC’s Fred Imbert and Yun Li, contributed to this report.
Correction: This article has been revised to reflect that Budweiser APAC is set to price its IPO on Sept. 23.

Sep 17, 2019

Asia | Asia Markets Closing Report: Asia trades mixed as oil prices remain elevated amid geopolitical tensions

Saheli Roy Choudhury



Asia markets traded mixed on Tuesday as investor sentiment turned cautious over rising energy prices and heightened geopolitical tensions.
In Japan, the benchmark Nikkei 225 erased earlier losses to finish fractionally higher at 22,001.32 while the Topix index added 0.29% to 1,614.58. South Korea’s Kospi index was near flat.
On Monday, U.S. President Donald Trump said the United States had reached initial trade agreements with Japan on tariffs and digital trade that will not require congressional approval.
Australia’s S&P/ASX 200 also reversed earlier declines to gain 0.33% to 6,695.30 as most sectors recovered. The energy subindex added 1% as oil names in the country gained.
Chinese mainland markets fell more than 1%: The Shanghai composite declined 1.74% to 2,978.12, the Shenzhen composite was down 2% at 1,651.35 and the Shenzhen component fell 1.97% to 9,722.80.
Reports said new home prices in China grew at their weakest pace in nearly a year in August as a slowing economy and existing curbs on speculative buying put a dent on overall demand.
In Hong Kong, the Hang Seng index dropped 1.4% in late afternoon trade.
Oil remained in focus after prices surged in the previous session. West Texas Intermediate futures gained more than 14%, notching its biggest one-day gain since 2008. International benchmark Brent also jumped more than 14% for the session.
Energy prices pulled back slightly on Tuesday during Asian hours: U.S. crude prices were down about 1.02% to $62.26 per barrel in the afternoon while Brent were steady at $69.03 per barrel.
The sharp moves came after a series of drone attacks hit the world’s largest oil processing facility in Saudi Arabia over the weekend, which halted the production of 5.7 million barrels of crude a day. That ’s more than half of Saudi Arabia’s global daily exports and more than 5% of the world’s daily crude oil production.
Saturday’s attack was claimed by Yemen’s Houthi rebels and the Trump administration has blamed Iran. A Saudi-led military coalition said Monday the attack was carried out by “Iranian weapons” and did not originate from Yemen.
The Kingdom’s national oil company, Saudi Aramco, reportedly aimed to restore about a third of its crude output, or 2 million barrel by Monday. But media reports suggest it could take weeks before Aramco restores the majority of its output at the affected production site.
Saudi Arabia’s “spare capacity and existing stockpiles (~26 days of export) should mitigate some of the lost output,” Vivek Dhar, director of mining and energy commodities research at the Commonwealth Bank of Australia, said in a morning note.

Asia-Pacific Market Indexes Chart

TICKER COMPANY NAME PRICE CHANGE %CHANGE
NIKKEINikkei 225 IndexNIKKEI22001.3213.030.06
HSIHang Seng IndexHSI26790.24-334.31-1.23
ASX 200S&P/ASX 200ASX 2006695.3021.800.33
SHANGHAIShanghaiSHANGHAI2978.12-52.64-1.74
KOSPIKOSPI IndexKOSPI2062.330.110.01
CNBC 100CNBC 100 ASIA IDXCNBC 1008025.31-53.77-0.67
Oil prices came off their session highs on Monday after Trump said he was authorizing the release of oil from the Strategic Petroleum Reserve to keep markets “well-supplied.” Analysts have said that energy prices could climb further if there is a military response from the Saudis, the U.S. or others.
“The surge in oil prices also reflects an increase in geopolitical premium,” Rodrigo Catril, a senior foreign exchange strategist at the National Australia Bank, wrote in a morning note. He said the weekend’s incident showed Saudi Arabia’s vulnerability to more attacks while at the same time, there’s heightened risk as both the Kingdom and the U.S. point fingers at Iran.
“For now is probably safe to say that there is a lot that we don’t know and as such oil prices are likely to remain elevated and volatile,” Catril said, adding that “higher oil prices will have implications to the global growth outlook which was already facing a challenging environment.”
In the currency market, the U.S. dollar index, which measures the greenback against a basket of its peers, last traded at 98.622, climbing from an earlier low around 98.590.
The U.S. Federal Open Market Committee is set to meet on Tuesday and Wednesday and markets expect the central bank to cut interest rates by a quarter point. Global growth outlook remains subdued amid the ongoing trade war between the United States and China.
Elsewhere, the Japanese yen traded at 108.15 against the dollar, weakening from an earlier level around 108.01. The Australian dollar changed hands at $0.6843, down from levels near $0.6870.
The Associated Press contributed to this report.

Sep 16, 2019

Asia | Asia Markets Closing Report: Asia Pacific stocks mixed; Brent crude spikes more than 8% after Saudi attacks

Eustance Huang



Stocks in Asia Pacific were mixed on Monday, as oil prices surged following drone attacks over the weekend that hit major oil production facilities in Saudi Arabia.
Mainland Chinese stocks were little changed on the day, with the Shanghai composite little changed at around 3,030.75 while the Shenzhen component was just below the flatline at 9,918.09. The Shenzhen composite added 0.23% to approximately 1,685.09.
A cut in the reserve requirement ratio for banks by the People’s Bank of China (PBOC) went into effect on Monday. The PBOC said in early September that its reserve requirement ratio would be cut by 50 basis points and it would further reduce that ratio by 100 basis points for some qualified banks. That’s set to release 800 billion yuan ($113 billion) in liquidity into the economy.
Meanwhile, Hong Kong’s Hang Seng index shed about 1%, as of its final hour of trading. Shares of Hong Kong Exchanges and Clearing slipped 2.16% following the rejection of its takeover bid by the London Stock Exchange Group last Friday.
Australia’s S&P/ASX 200 closed fractionally higher at 6,673.50 as majority of the sectors declined with the exception of the energy subindex, which soared 3.99% on the back of a surge in oil prices.
Over in South Korea, the Kospi rose 0.64% to end its trading day at 2,062.22 higher despite shares of chipmaker SK Hynix plunging 3.75%.
Overall, the MSCI Asia ex-Japan index traded 0.32% lower.
Markets in Japan were closed on Monday for a holiday.

Crude prices surge, oil stocks spike

Crude prices spiked in the afternoon of Asian trading hours after drone strikes on crucial oil production facilities in Saudi Arabia.
International benchmark Brent crude futures skyrocketed 8.67% to $65.44 per barrel, while U.S. crude futures jumped 7.91% to $59.19 per barrel. Earlier on Monday, Brent spiked as much as 19% to $71.95 a barrel, while U.S. crude jumped more than 15% to a session high of $63.34 a barrel.
Shares of oil companies in Asia Pacific surged on Monday. Australia’s Woodside Petroleum jumped 4.31% and Santos gained 4.87%. Over in South Korea, S-Oil saw its stock gain 2.31%. Hong Kong-listed shares of Chinese oil titan Petrochina also soared 4.97% while CNOOC skyrocketed 7.23%, as of their final hour of trading.
Over the weekend, drone attacks hit the heart of Saudi Arabia’s oil production facilities in Abqaiq and Khurais claimed by Yemen’s Houthi rebels. Half the country’s oil production was halted due to fire damage and an assessment of the situation is due on Monday, Saudi energy ministry officials said.
National oil company Saudi Aramco is attempting to restore about a third of its crude output by Monday following the attacks, the Wall Street Journal reported Sunday.
Strategists at Commonwealth Bank of Australia said the uptick in crude prices may not last.
“The drone attacks have hit the oil market at a time when there is a global oil glut and global growth is weak,” they wrote in a note. “Consequently, the impact on oil prices and global growth is not expected to be significant or last long.”

China industrial output growth slows further

China’s industrial production growth saw its slowest pace in 17 and a half years in August, rising just 4.4% year-on-year.
That came in below a forecast of a 5.2% year-on-year increase by analysts in a Reuters poll. Industrial output growth in the country saw an expected drop to a more than 17-year low in July.
“I think it is very much a bottoming process that we’re seeing in the Chinese economy,” Leon Goldfeld, multi-asset portfolio manager at J.P. Morgan Asset Management, told CNBC’s “Street Signs” on Monday.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 98.192 after seeing highs above 98.8 last week.
The Japanese yen, often seen as a safe-haven currency in times of market turmoil, strengthened to 107.85 against the dollar after seeing lows above 108.0 late last week.
The Australian dollar changed hands at $0.6873 after rising from levels below $0.684 in the previous trading week.
— Reuters and CNBC’s Natasha Turak contributed to this report.

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