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The Week Ahead: 1MDB-Tanore and US politics in focus

TheEdge Mon, Sep 30, 2019 03:00pm - 1 month ago


The start of the final quarter of the year will see the 1Malaysia Development Bhd-Tanore (1MDB-Tanore) trial, which resumes on Monday, remain a major focus at home.

Datuk Shahrol Azral Ibrahim Halmi, who was the 1MDB CEO from its inception in 2009 to 2013, will continue to testify this week for the second straight week.

On the economic front, the Department of Statistics Malaysia will come out with August external trade data on Friday (Oct 4).

Things will be quiet in China this week as it celebrates Golden Week from Oct 1 to 7. President Xi Jinping will deliver a speech on Tuesday — China’s national day, which is its most high-profile event of the year. The highlight of the day is expected to be a military parade through central Beijing.

While the US-China trade talks will continue to keep investors on their toes, headlines out of China will likely turn scarce given the week-long holiday. The next ministerial-level trade talks between the two is scheduled for Oct 10 and 11 in Washington.

There will be spillover news on the high-level proceedings of the 74th General Assembly of the United Nations, which concludes on Monday.

Developments in US politics, however, will be at the forefront of news as the risk of impeachment proceeding against US President Donald Trump has increased after a congressional panel last week released a whistleblower complaint that accused the president of pressing a foreign government to investigate a potential rival at next year’s presidential election.

“That said, the US Congress will sit for its last session on Sept 27 before it enters a two-week recess, but the House of Representatives may delay or even cancel its recess in order to resolve the issues related to authorising an impeachment inquiry,” UOB Global Economics & Markets Research says in an outlook report last Friday.

The whistleblower is a CIA officer, according to US media reports.

Meanwhile, it will be a busy week for macroeconomic data releases in the US. Among key data are August trade numbers (Oct 4), construction spending (Oct 1), August factory orders (Oct 3) and the September US labour market report (Oct 4).

It will be interesting to see how the world’s largest economy stands up in August following its prolonged trade war with China.

Over in the UK, the Parliament resumes its session after the Supreme Court ruled against Prime Minister Boris Johnson. Observers say the main agenda could be whether there will be a no-confidence vote against him.

On Monday, a day before its national day, China will release the Caixin/Markit manufacturing Purchasing Managers’ Index (PMI) for September, an indicator of the country’s factory activity. The index is expected to ease to 50.2 from a five-month high of 50.4 in August.

There will also be official September manufacturing and non-manufacturing PMI survey data.

Apart from China and Hong Kong, regional markets with public holidays this week are India on Oct 2 (Mahatma Gandhi’s birthday) and South Korea on Oct 3 (National Foundation Day).

Thailand, Indonesia and South Korea will release their Consumer Price Index (CPI) data on Tuesday, and the Philippines’, on Friday. South Korea will release September trade data on Monday, while there is August trade data from Australia on Friday.

The Reserve Bank of Australia (RBA) and Reserve Bank of India (RBI) have monetary decisions this week, on Oct 2 and Oct 4 respectively. Most economists expect the RBA to cut its policy rate by 25 basis points to 0.75%. As for the RBI, economists in a Bloomberg poll all expect it to cut rates further but differ in opinion on the magnitude of the cut, following the surprise 35bps cut in September. Of the 10 economists polled, seven see it cutting the repo rate by 25bps to 5.15%, while two expect a deeper cut of 40bps.

Companies with annual general meetings this week include LB Aluminium Bhd (Sept 30), KESM Industries Bhd (Oct 1), Sunway Real Estate Investment Trust (Oct 2), Berjaya Media Bhd (Oct 3), Bermaz Auto Bhd and Analabs Resources Bhd (both on Oct 4).

Those with extraordinary general meetings are Dayang Enterprise Holdings Bhd (Oct 1) and Daibochi Bhd (Oct 4).








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