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Economists lower forecasts for Malaysia’s 2021 progress on Covid lockdown

A woman can be seen in Kuala Lumpur with a Malaysia flag as a background.

SOPA pictures | Getty

SINGAPORE – Several economists have cut their growth forecasts for Malaysia for 2021 after the country announced stricter measures to contain a recent surge in Covid-19 cases.

The Malaysian government imposed a nationwide interstate travel ban and a ban on six states and territories for two weeks from Wednesday. The king of the country also declared a state of emergency which will last until August 1 or earlier if Covid cases are effectively lowered.

Here are some economists who have cut their forecasts for Malaysia:

  • Capital Economics, a consulting firm, said the Southeast Asian country will grow 7% this year, up from its previous forecast of 10%;
  • The Singaporean bank UOB downgraded its forecast from 6% to 5%;
  • The Japanese bank Mizuho lowered its forecast from 6.7% to 5.9%;
  • Fitch Solutions has lowered its forecast from 11.5% to 10%.

Malaysia was one of the worst performing economies in Asia over the past year. The International Monetary Fund announced in October that the Malaysian economy would contract 6% in 2020, up from 4.3% last year.

Alex Holmes, Asian economist with Capital Economics, said in a report Tuesday that Malaysia’s recent lockdown “is likely to hit the economy hard”. He pointed out that the six restricted states and areas – including the capital Kuala Lumper and Malaysia’s richest state, Selangor – account for 57% of the population and 65% of the gross domestic product.

The lockdown – known locally as a movement control order or MCO – includes banning all social gatherings and dine-ins, closing schools, and opening only “essential” businesses.

Most of the rest of the country has been made less stringent, with most companies allowed to operate but prohibited activities involving large gatherings.

UOB economists said in a Wednesday report that their growth forecast downgrade assumed the restrictions would be extended for another four weeks through the end of February. However, the macroeconomic impact of the latest measures is likely to be “less severe” than last year when the whole country was locked down, the economists added.

‘Blessing in disguise’

The state of emergency declared on Tuesday shook the country’s stocks and currency.

But the move will remove the short-term political uncertainty the country has struggled with over the past year – and that could be “a blessing in disguise” for the Malaysian ringgit, said Lavanya Venkateswaran, market economist at Mizuho.

The currency was down 0.5% against the US dollar in response to Tuesday’s state of emergency announcement. Since then it has strengthened against the greenback and has more than made up for these losses.

Malaysian Prime Minister Muhyiddin Yassin said that in a state of emergency there would be no curfew and that the government and judicial system would continue to function. But parliament will be suspended and elections cannot be held, he said.

Muhyiddin came to power in March last year and has been increasingly called on by his ruling coalition to resign and make way for an early election.

The emergency statement “removes unnecessary and self-inflicted political uncertainties that could jeopardize the political response to the COVID resurgence,” Venkateswaran wrote in a report on Tuesday.

“Instead a stable political platform to (the) An emergency pandemic is ultimately positive in getting the economy going again. “ She said.

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World News

RBI financial coverage committee member on inflation, development

SINGAPORE – Inflationary pressures and the state of economic recovery will guide future policy moves by the Reserve Bank of India, a member of the bank’s monetary policy committee told CNBC.

In her personal capacity, Ashima Goyal, who is also an economics professor at India’s Indira Gandhi Development Institute, said the RBI’s monetary policy committee “is concerned about inflation”.

According to local media reports, Goyal was appointed to the central bank’s monetary policy committee in October.

“Inflation has been above our target for the past few months, but it has been falling over the past month,” she said on CNBC’s Street Signs Asia on Wednesday.

“I think the reason for this is that the ongoing effects of the lockdown are generally less than expected,” Goyal said. She referred to India’s national lockdown between late March and May to slow the spread of the coronavirus, causing a collapse in private consumption and investment demand and forcing the economy into two consecutive quarters of contraction.

We believe that inflation will return to the target range.

Ashima Goyal

Member of the Monetary Policy Committee of the Reserve Bank of India

Economists were unimpressed by the government’s fiscal measures announced last year to revive growth. Some suggest it was up to the RBI to do the heavy lifting on short notice. The central bank has kept the key interest rate at which it grants commercial banks loans unchanged since May.

Inflation has remained well above the RBI’s target range of 2% to 6% in recent months. However, retail inflation fell to 6.93% in November as food prices fell, Reuters reported. Some economists expected inflation to continue easing in both December and early 2021.

“Due to inflationary pressures, the RBI has been on hold and has not cut rates after the initial cuts. They have been stable over the past few months,” said Goyal, adding: “We believe inflation will return to the target range. “” It did not provide a precise timetable for when inflation could fall below 6%.

When asked about future central bank interest rate movements, Goyal said the monetary policy committee would make “data-driven” decisions. “We are seeing what happens to inflation and how the recovery takes shape,” she added.

The World Bank recently forecast a recovery in Indian economic growth to 5.4% in 2021 but said “The recovery from a low base will be offset by subdued private investment growth amid weaknesses in the financial sector.”

A naval officer walks past the Reserve Bank of India (RBI) building in Mumbai, India on Tuesday, March 3, 2020.

Kanishka Sonthalia | Bloomberg | Getty Images

Citi economists said in a statement Monday that data suggests the government’s position is “less precarious” ahead of the 2022 budget submission on Feb.1. They said that while government spending on incentives subsided in areas such as agriculture and rural areas, spending by infrastructure-related ministries such as railways, road transport, water and housing has picked up.

While a compression in government spending weighed on the second quarter of India’s fiscal year 2021, which ends March 31, Citi economists said, “Spending trends in the (third quarter) support the recovery in growth.”

The government has also generated better-than-expected gross tax revenues in recent months, suggesting “a less challenging fiscal position,” the economists said.

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Business

21 years of airline passenger site visitors progress erased in 2020: journey report

A passenger checks flight information on a board in the departure lounge of Madrid Barajas Airport.

Paul Hanna | Bloomberg | Getty Images

SINGAPORE – More than two decades of passenger traffic growth were erased in 2020, according to a new report.

“The pandemic and its aftermath have wiped out global passenger traffic growth by 21 years in just a few months, reducing traffic this year to 1999 levels,” said Cirium, a travel data and analytics company.

“Compared to the previous year, passenger traffic is expected to decrease by 67% in 2020,” said a press release.

In 2020, only 2.9 trillion passenger kilometers (RPKs) were registered worldwide, compared to 8.7 trillion in 2019. RPKs are used as a measure of air travel.

The aviation industry was hard hit by the coronavirus pandemic as countries closed their borders to contain the spread of the disease.

According to Cirium, the airlines operated 16.8 million flights from January 1 to December 20, 2020. This corresponds to a decrease of 33.2 million in the same period of 2019.

More than 40 airlines have completely ceased or ceased operations, and experts predict that more will fail in 2021, according to Cirium.

Road to recovery

The Asia-Pacific region and North America have “emerged fastest on the long road to recovery,” according to Cirium’s Airline Insights Review 2020 report.

This trend was reflected in Cirium’s list of the world’s busiest airports, which was dominated by airports in the United States and China.

David White, vice president of strategy at Cirium, admitted that big cities like New York, Beijing and Shanghai were missing from the list and told CNBC that airports like John F. Kennedy in New York were “disproportionately affected” in their international traffic normal times. “

“Airports like Minneapolis, O’Hare (Chicago), [Dallas-Fort Worth]”Atlanta and Charlotte now have significantly higher traffic than JFK because of the volume of domestic flights at these domestic hub airports,” he said. A similar pattern has been reported observed in some Chinese airports.

International flights were down 68% compared to 2019, while domestic travel was down 40%.

Cirium expects passenger demand for air travel to recover in 2024 or 2025, with domestic and leisure travel being the first segments to show a “sustained recovery”.

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Business

Daniel M. Tellep, Engineer Who Steered Lockheed’s Progress, Dies at 89

Daniel M. Tellep, an aerospace engineer who initiated a merger between Lockheed and Martin Marietta to become the world’s largest military entrepreneur and then became its first general manager, died on November 26th at his home in Saratoga, California. He was 89 years old.

His death was confirmed by his daughter, Susan Tellep.

Mr. Tellep was at the helm of Lockheed when the Cold War ended. Calabasas-based Lockheed has struggled with easing global tensions and examining potential decreased demand, as has Martin Marietta, who was led by Norman R. Augustine at the time. The merger in 1995 created a giant in the defense industry. In 2019, Lockheed Martin had net sales of $ 59.8 billion.

“The ‘Fusion of Equals'” he orchestrated between Lockheed and Martin “resulted in innovations and capabilities that continue to protect our nation, our allies and our highest ideals,” said Marillyn Hewson, chairwoman of Lockheed Martin, in one Explanation after Mr. Tellep’s death.

As a managing director at Lockheed and then Lockheed Martin, Mr. Tellep was responsible for the development of military communications satellites, photographic communications satellites, the Hubble space telescope, and more.

As an engineer at Lockheed, he pioneered space and rocket technology systems. He was the lead scientist on the country’s first re-entry flight experiments, which were conducted to determine how best to get a nuclear missile through the atmosphere into space and then back into the atmosphere without being destroyed. He also worked on ballistic missile systems fired from submarines and on the manufacture of thermal tiles to protect space shuttles.

“He basically had a lot of knowledge about how to prevent things from burning,” said his long-time colleague David Klinger in a telephone interview. “He was very good at both math and practicality at actually making things work. And he was so good that the company blamed him for more and more people. “

Daniel Tellep was born on November 20, 1931 in Forest City, Pennsylvania, about 25 miles northeast of Scranton to John and Mary Tellep. His father worked as a coal processor and then as a carpenter. His mother, who immigrated from Eastern Europe as a child, worked for a thread company. The family later moved to San Diego, where his father worked as a machinist and where Daniel grew up.

Daniel was obsessed with escape from a young age when he began to develop a lifelong passion for model airplanes. In a memoir he wrote for his family, he recalled building his first:

“No doubt the finished model was rough, but there it was three-dimensional and recognizable as one of the most popular aircraft of the era. I could hold it on my arm and move it like it was in flight. I remember looking at it for hours. “

He studied mechanical engineering at the University of California at Berkeley, graduated summa cum laude in 1954 and earned a master’s degree in 1955. That year he moved to Lockheed. He was the main scientist of the X-17, one of the earliest research rockets.

Mr. Tellep’s work in re-entry technology and thermodynamics earned him the Lawrence B. Sperry Award from the American Institute for Aeronautics and Astronautics at age 32. He was later elected to the National Academy of Engineering.

Mr. Tellep rose to the ranks of Lockheed in 1984 and was named President in 1989 and Chairman and Chief Executive Officer in 1989. The company had problems and helped solve the problem. He was in charge when he received a major contract to build the F-22, the Air Force’s newest generation of combat aircraft at the time. The deal resulted in $ 70 billion in sales for the company and its partners and cemented Lockheed’s recovery.

His leadership was noticed.

“During Lockheed’s troubles of recent years, Mr. Tellep has retained his characteristic outward calm and kindness,” wrote the New York Times in 1991 of him, “although he proved as tough as the most ruthless corporate robbery.”

Mr. Tellep became the first chairman and chief executive officer of Lockheed Martin in 1995. He was CEO for nine months and remained chairman until 1998.

He met Margaret Lewis in college and married her in 1954. The couple had four girls and were later divorced. He met and married the psychotherapist Patricia Baumgartner in 1970. They stayed together until their death in 2005.

In addition to his daughter Susan, his three other daughters Teresa and Mary Tellep and Patricia Axelrod survive him. his first wife with whom he stayed close; two stepdaughters from his second marriage, Chris Chatwell and Anne Bossange; seven grandchildren; and five great-grandchildren.

Mr. Tellep’s passion for flying extended into his adult years when he took to the skies in non-motorized gliders, which required a deep knowledge of wind and thermodynamics. He flew remote-controlled airplanes until his early 1980s. And the model airplanes he built as a boy, including a cherished airplane he lost, stuck in his memory.

“I started the glider on a hot summer’s day,” he wrote in his family memoirs, “and it seemed to be circling forever and barely descending. This was when I was learning about “thermals”. This rising column of air carries all light with it – and that included my glider. Since I did not write my name on it, there was no way it could be returned. Now, so many years later, it’s different for me. “

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World News

Goldman says bitcoin is monitoring copper, a key proxy for international development

An illustration of bitcoin on euro banknotes.

Nicolas Economou | NurPhoto via Getty Images

Goldman Sachs analysts have found a surprisingly similar trend between the world’s most valuable virtual currency and a base metal with a reputation as a barometer for the global economy.

Bitcoin and copper prices have been on a rift for most of this year, reaching record highs amid the ongoing coronavirus pandemic.

“Both institutional investors and high net worth individuals avoid cryptocurrencies because of their inherent transparency problems, while speculative retail investments lead to Bitcoin acting as an overly risky commodity,” said Goldman Sachs analysts in a research report published on Thursday.

“Since the depths of the initial lockdown, Bitcoin has closely followed the rise of copper, a key indicator of global growth,” they added.

Bitcoin prices have skyrocketed. The volatile cryptocurrency, which reminded many market participants of a similar rally in 2017, surged above $ 20,000 for the first time in its history on Wednesday.

According to crypto market data provider Coin Metrics, the company has since topped $ 23,000 before cutting its profits to around $ 22,899 on Friday. In mid-March, during the first wave of the coronavirus pandemic, Bitcoin was trading below $ 5,000.

Bitcoin’s increasing popularity has made it a widespread asset, much like fiat currencies.

The smelter will melt copper on July 23, 2020 in Jinhua, Zhejiang, China.

TPG | Getty Images News | Getty Images

Meanwhile, copper prices topped $ 8,000 a ton on Friday, their highest level since February 2013. Three-month copper prices on the London Metal Exchange have since reduced profits, trading at $ 7,991 during midday trading.

The commodity has increased by more than 28% since the start of the year, which is the fourth positive year in five years.

Copper’s 2020 bull run coincides with a rally among other stocks and risk assets over the past few weeks, with market sentiment improving on positive news about Covid-19 vaccines.

Copper – sometimes also Dr. Called Copper – has the reputation of a barometer for the world economy among market observers. The base metal is viewed this way for its wide range of end uses – both in construction and in consumer products such as automobiles and consumer products.

Earlier this month, Goldman Sachs said it was “very likely” that copper prices would test the 2011 highs of $ 10,170 by the first half of 2022.

“Bitcoin is the reflation trade in retail”

Goldman Sachs analysts not only identified the mirrored rally of bitcoin and copper in recent months, but also believed that bitcoin and gold could “coexist”.

“Gold’s recent underperformance against real rates and the dollar has made some investors concerned that Bitcoin is replacing gold as the inflation hedge of choice,” the US investment bank said.

“While there is some substitution, we do not see the growing popularity of Bitcoin as an existential threat to gold’s status as a currency of last resort.”

The bank added, “From our perspective, Bitcoin is trading in retail reflation while gold is a defensive asset with long-term preservation of real capital.”

– CNBC’s Katrina Bishop contributed to this report.