Tue, May 08, 2018 - Page 10 News List

World Business Quick Take

Agencies

GERMANY

Low industry orders surprise

Industrial orders in March unexpectedly dropped for the third consecutive month due to weak foreign demand, data showed yesterday, suggesting that factories are facing headwinds from rising protectionism. Contracts for goods fell 0.9 percent after a revised drop of 0.2 percent the previous month, Federal Statistics Office data showed. Analysts had on average predicted a 0.5 percent rise in orders. “A decline of 0.9 percent is a setback that really hurts,” VP Bank Group analyst Thomas Gitzel said. “The economy is slowing down, that’s the sure takeaway from today’s industrial orders data.” Some growth forecasts would soon have to be revised down, he added.

TRADE

ECB blasts protectionism

The European Central Bank (ECB) reiterated its belief that a rise in trade protectionism would undermine the global economy, and said that the US would bear the brunt of the damage. “In the event of a significant increase in protectionism, the impact on global trade and output could be material,” ECB researcher Lucia Quaglietti wrote in an Economic Bulletin article yesterday. “The impact could be particularly severe in the US.” Global risks such as tariffs are a concern for the ECB, which is witnessing the euro-area economy slow after the strongest growth in a decade last year. ECB President Mario Draghi has said that while the effects of already-adopted protectionist measures is limited, the prospect of a trade war between the US and China could damage confidence and reduce consumption and investment. Escalating trade tensions would harm the economy via higher import prices, increased volatility in financial markets, reduced credit supply and eventually crippled productivity growth, the article said.

BANGLADESH

Joint venture to build plant

The state-run Bangladesh Power Development Board (BPDB) and China Huadian Hong Kong Company Limited (CHDHK, 中國華電香港) have signed an agreement to form a joint venture company to set up a coal-based power plant with a capacity of 1.32 gigawatts, a senior BPDB official said yesterday. “These two firms signed the deal on Sunday to set up the plant at Moheshkhali Island in Cox’s Bazar District,” BPDB director Mohammad Saiful Islam said. The venture, equally owned by both firms, would take four years to begin, the official said. Another official, who is directly involved with the project, said that as per the initial plan, it might cost about US$2 billion to implement the project. The nation plans to provide electricity to all of its citizens by 2021.

HEALTHCARE

Good Doctor IPO crashes

Investors could not get enough of Ping An Healthcare & Technology Co’s (平安健康醫療科技) initial public offering (IPO). Now they cannot get out fast enough. The company, also known as Good Doctor (平安好醫生), fell as much as 11 percent to trade below the low end of the range offered to investors in the sale, before paring losses to 3.3 percent at 10:33am in Hong Kong. The stock, which drew US$47.5 billion of retail money for a US$1.1 billion IPO, on Friday last week closed unchanged in the worst first-day performance by a tech firm on the territory’s main board in almost four years. Investors are dumping their shares after the firm struggled to live up to the hype, despite the retail portion being 653 times oversubscribed. The share sale valued the firm at about six times projected 2020 sales, compared with 5.1 times for Tencent Holdings Ltd (騰訊), according to Bloomberg Intelligence.

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