Month: June 2015

BP CEO: Shale revolution ‘very painful’ for much of world

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The shale gas revolution will be “very painful for many parts of the world,” with the US potentially the globe’s new swing producer, the head of BP told CNBC on Tuesday.

The nascent shale industry-in which “unconventional” gas is drilled from the ground through hydraulic fracturing or “fracking”-is heavily dominated by the US It has boomed in recent years, partly as a result of access to cheap financing, helping to push global oil prices to record lows.

BP CEO Bob Dudley told CNBC that the “revolution” (his word) meant the US might supersede Saudi Arabia as the world’s major swing oil producer, able to alter its production to balance supply and demand.
He saw the price of oil—which has recovered somewhat this year but is still down around 40 percent from the USD 100+ levels seen before July 2014—remaining “lower for longer.”

Read More: Pipe dream: Why US oil will never go it alone

“There will undoubtedly be stress out there if oil prices stay lower,” Dudley said.

He added that there could be further consolidation in the energy industry in this scenario, but that he saw BP as neither “predator nor prey” currently.
Along with shale gas production, the refusal of the Organization of Petroleum Exporting Countries (OPEC) to cut production is viewed as a factor in the tumble in oil prices. The body will hold a key meeting on Friday at which it is expected, once again, to hold production at 30 million barrels of oil per day.

Read More: Saudi oil minister ‘not stressed’ as OPEC meet looms

Dudley said that the “winners” from low oil prices were “clearly” importers like China, India, Indonesia and much of Europe. Even the US was a beneficiary, he said, because the coastal states are predominately net importers of oil rather than exporters.

He added that BP intended to maintain its presence in Russia, despite tensions with the West, with no plans to sell its 20 percent stake in Rosneft. The Russia oil company is majority-owned by the Russian state and CEO Igor Sechin has close ties to Vladimir Putin.

Read More: Rosneft chief earns up to USD 4.7M in basic salary

“We stay out of the politics,” said Dudley, adding, “We have a lot of experience in Russia … our commitment is to remain.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Greece’s creditors draft deal to unlock aid, Athens resists

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Greece’s creditors on Tuesday drafted the broad lines of an agreement to put to the leftist government in Athens in a bid to conclude four months of acrimonious negotiations and release aid before the cash-strapped country runs out of money.

The joint effort by the European Commission, the European Central Bank and the International Monetary Fund to set out the terms for a cash-for-reforms deal came after the leaders of Germany and France held emergency talks with those institutions in Berlin on Monday night to press the lenders to bridge their own differences and find a solution.

“It covers all key policy areas and reflects the discussions of recent weeks. It will be discussed with (Greek Prime Minister Alexis) Tsipras tomorrow,” a senior EU official said.

Another official said German Chancellor Angela Merkel and French President Francois Hollande would put the plan to Tsipras by telephone within hours to try to secure his acceptance.

A Greek government official said Tsipras would travel to Brussels on Wednesday for a meeting with European Commission President Jean-Claude Juncker in the evening, upon Juncker’s request.

“The prime minister will be in Brussels tomorrow with the Greek proposal in his luggage,” the official said.

Tsipras, who has vowed not to surrender to more austerity, tried to pre-empt a take-it-or-leave-it offer by the creditors, sending what he called a comprehensive reform proposal to Brussels on Monday before they could complete their version.

Euro zone officials branded the Greek text insufficient and said it was not formally on the table.

The Greek leader faces a backlash from his own supporters if he has to accept cuts in pensions and job protection to avert a default and keep Greece in the euro zone.

Despite defiant rhetoric and face-saving efforts, he seems likely to have to swallow painful pension and labor reforms, facing the choice between putting them to parliament at the risk of a revolt in his Syriza party, or calling a snap referendum.

Read More: Greek crisis: 2,400 hours of brinkmanship

Starved of aid and access to bond markets, Athens is precipitously close to running out of money. It has threatened to default on an IMF payment this week without a deal, though it also says it will reject any ultimatums.

Failure to reach agreement this month could trigger a Greek default and lead to the imposition of capital controls and a potential exit from the euro zone, dealing a serious blow to Europe’s supposedly irreversible single currency.

The euro zone source said the Greek document contained no significant concessions on the main outstanding issues of pension and labor market reform, fiscal targets and the size of the civil service.

The European Union’s economics chief said earlier Athens had put forward first proposals for pension reform as the talks reach a crunch point this week with Greek funds drying up.

The chairman of euro zone finance ministers, Jeroen Dijsselbloem, who was not at the Berlin meeting, said there were growing indications that Greece wanted a deal, but that required the Greek government to tell its voters the truth, that it will not be able to deliver on all its election promises.

“There are signs that Greece and Tsipras are motivated to achieve a breakthrough,” Dijsselbloem told RTL Nieuws. “We aren’t far enough along and time is pressing.”

Read More: Greek talks ‘progressing’…so where’s the deal?

“The bottom line is that we are not going to meet them halfway,” he said. “The package as a whole must make sense in budgetary terms.”

‘Real intensity’

The Berlin meeting showed that national and international leaders have taken the battle to keep Greece in the euro zone into their own hands after months of insisting it was a matter for technical negotiations among experts.

A Greek government official said Athens would make a 300 million euro ($329.58 million) repayment to the IMF on Friday as due if there was an agreement with the creditors, hinting it might otherwise withhold the money without saying so explicitly.

“If we judge that a deal has been sealed, then we will make the June 5 payment normally,” the official said, adding that the money would be transferred even if a preliminary agreement had not yet been approved by Eurogroup finance ministers.

Greece’s central bank governor, Yannis Stournaras, who served as finance minister in a previous conservative-led government, urged the government to respect the “sacrifices” its people had made to stay in the euro, citing a 35 percent drop in living standards since the crisis began in 2009.

EU Economy Commissioner Pierre Moscovici deflected Greek demands for official debt relief, saying the issue of making Greek debt sustainable in the longer term would only be addressed once Athens had accepted a reform deal to release some 7.2 billion euros in frozen aid.

That program expires at the end of June unless there is an agreement.

The ECB’s top banking supervisor, Daniele Nouy, stressed on Tuesday that Greece’s banks remain solvent despite deposit outflows and the government’s cash squeeze – a key condition for the central bank continuing to provide emergency liquidity.

Greek officials say the IMF has been toughest in demanding pension cuts and opposing any restoration of collective wage bargaining, while some euro zone governments have privately accused Juncker and Moscovici of being too soft on Athens.

Greece has received two EU/IMF bailouts totaling 240 billion euros since 2010, when it lost access to capital markets after admitting it had issued erroneous figures for years concealing the true scale of its budget deficit.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Why June could be a turning point for markets

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Even beyond talk of a “June swoon,” an unusual number of major events makes this month a critical time for markets.

From this week’s European Central Bank meeting, to OPEC’s Friday meeting and the G-7 over the weekend, the month is packed with events—not least of which is the Fed’s June 16 and 17 meeting. Greecehas a payment due to the IMF on Friday, and that has added a level of tension to markets this week.

“Clearly, the resolution in Greece and how that risk resolves itself is the biggest near-term risk factor that has us concerned,” said Joseph Lupton, senior global economist at JPMorgan. “It has the potential to do the most damage.”

June is also a pivotal time for the economy. Fed Chair Janet Yellen has said the central bank could raise rates this year depending on the economy. So each measure of the economy’s strength has become very important, and Friday’s employment report tops of the list.

Read More: Data mixed but economy is recovering

“The bar has been raised to see a turn in the data, if we’re going to dig out of the first-quarter pothole in any way that makes us feel like things are getting back on track,” said Lupton.

“If last year was the template, we should have seen things turning, and we haven’t. While we’re not looking for the strong bounce we saw last year, we need to see things moving back up.”

For the US, the big events are the May employment report Friday, and the Fed’s meeting later in the month. There are 225,000 nonfarm payrolls expected, barely higher than the 223,000 in April.

Read More: Why the Fed may be forced to raise rates

Economists are watching to see if the US data begin to improve after the first quarter’s 0.7 percent contraction in GDP. Second-quarter forecasts have been lowered from growth of more than 3 percent, to about 2.5 percent as the economic reports continue to disappoint.

Read More: Oil chart shows bearish market set to resume

Stocks enter June on a positive footing, after May’s 1 percent gain in the S&P 500. June historically is more often a weak month for stocks. The S&P 500 was up 4 at 2,111 on Monday, and the Dow was up 29 to 18,040. For the Dow, June has been the second-worst performer over the past 20 years, and the Dow has declined in eight of the past 10 Junes, for an average loss of 1.6 percent.

Some strategists expect to see a pullback in the stock market in the void ahead of the next earnings season.

“I’m not a big buyer of seasonal factors,” said Savita Subramanian, chief US equity and quantitative strategist at Bank of America Merrill Lynch.

But she said there are factors that give her concern, including the fact that second-quarter earnings could be negative.

The S&P 500 was trading in a range between 2,102 and 2,120 on Monday, “and our target is 2,200. I think we could hit a soft patch here,” she said.

But Subramanian expects stocks to do well this year, thanks in part to the easing of central banks. “It’s hard to be short global growth when central banks are behind this effort to reinvigorate their economies,” she said. That should help the stocks of multinationals.

The Fed is getting very close to set an opposite course, tightening as the other central banks continue to ease. While not likely, she said it would be very negative if the U.S. central bank were to find the economy too weak to raise interest rates.

It would be even worse if it moved back to extraordinary easing programs. “That would be the death knell for risk assets,” she said.

Subramanian said she’s not concerned about the spillover on US stocks from a negative event in Greece, and in fact it might drive funds to the US Analysts give a Greek exit from the euro zone higher odds than in the past, but the markets have mostly expected a resolution.

“Our house view is the likelihood of an exit is low,” she said. “I don’t think it’s going to undermine the entire global economy.” Greece is due to make a 300 million euro (USD 327 million) repayment to the International Monetary Fund on Friday and another 1.2 billion euros this month.

As negotiations drag on without an agreement between Greece and its lenders, speculation has grown that Greece will have to impose capital controls. Lupton said that could buy more time.

“There are uncertainties here. How much of a liquidity shock is this going to represent? The other uncertainty is what (Prime Minister Alexis) Tsipras wants to do with the time that is created by capital controls. Tsipras wants to have Greece stay in the euro area, but the road they’ve gone down is pushing them toward an outcome where that is more unlikely.”

Lupton said while the ECB is not expected to take action at its Wednesday meeting, the bank’s news conference will likely generate headlines about Greece.

The same could be true of the G-7 meeting. “I think probably the G-7 meeting continues to get consumed by the whole Greek thing,” said Stephen Stanley, chief economist at Amherst Pierpont Securities. The summit will be held in Germany.

“It feels like the Europeans have done everything they could to inoculate the rest of the currency bloc in the event Greece defaults. Even so, we continue to hang on every word and act as if it’s a big deal if something happens. Frankly, for as trivial as Greece’s economy is in the world economic context, here we are five years later and we’re still talking about it,”Stanley said.

Read More: Naimi says Saudi strategy is working

Traders also are watching the Organization of the Petroleum Exporting Countries meeting Friday. While OPEC is expected to stick to its 30 million barrels a day production quota, headlines from the event could influence the oil market.

The cartel has actually increased output, pumping 31.2 million barrels a day in May, according to Reuters.

OPEC, in November, decided to keep production unchanged and said it would let the markets determine oil prices. Since then oil collapsed, but has rebounded recently. West Texas Intermediate was trading near $60 a barrel Monday.

Markets are also watching for a June 9 decision on whether mainland China shares are going to be used in the MSCI index. That ruling, if affirmative, means that China shares would be included in its Emerging Markets Index, which is the index used for the largest Emerging Market ETF.

Read More: Traders brace for MSCI decision on China

Marc Chandler, chief currency strategist at Brown Brothers Harriman, said other events he’s watching in June include the Turkish election June 7 and the EU summit June 25 and 26. “On June 15, Saudi Arabia is going to launch a QFII,” he said.

The qualified foreign institutional investors program will allow foreign investors access to the Saudi market.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian stocks mostly lower ahead of central bank decisions

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian stocks opened mostly lower Tuesday ahead of the release of central bank decisions in Australia and India.

The Reserve Bank of Australia (RBA) is expected to leave its cash rate steady at a record low of 2 percent, following two 25-basis-point rate cuts earlier this year. All 24 economists polled by Reuters expect the RBA to be on hold, but eight respondents say interest rates could be reduced to 1.75 percent or lower by December, if non-mining business investments remain subdued.

Meanwhile, India’s central bank will announce its policy decision later at 1330 SIN/HK and is expected to lower its main repo rate to 7.25 percent from 7.5 percent, according to a Reuters poll. Easing inflation will be the impetus for the Reserve Bank of India (RBI) to pull off its third rate cut of the year, experts say.

“Core inflation has moderated, suggesting that the momentum in the real economy is fading. The production impulse has been weak in recent months, while credit growth has failed to take off,” analysts from Moody’s Analytics wrote in a note. “With the economy operating under a negative output gap, and monetary policy is still relatively tight, we believe the RBI should ease pressure by cutting rates.”

Overnight, US stocks ended with modest gains on the first trading day for June on the back of mixed second-quarter economic reports. The Dow Jones Industrial Average and the S&P 500 added 0.2 percent each, while the tech-heavy Nasdaq notched up 0.3 percent.

Mainland markets mixed

China’s Shanghai Composite index extended gains to notch up 0.2 percent, after rallying over 4 percent in the previous session following data that showed a pick-up in factory activity last month. Also calming jitters were comments by state-owned media Xinhua News Agency which said Sunday that a “bull-market” outlook was still in place.

China Everbright Bank opened down over 1 percent following news that it has received regulatory approval to issue domestic preference shares in private placement.

Meanwhile, Hong Kong’s Hang Seng index eased 0.5 percent from the get-go.

China’s fourth-biggest listed brokerage Huatai Securities recovered from Monday’s unimpressive trading debut to bounce up 0.5 percent in early trade.

L’Occitane International sagged 2.2 percent despite reporting a 35 percent jump in 2014 profit.

Also in focus are Macau-related gaming plays as the city’s gross gaming revenue fell 37.1 percent in May from a year ago, better than the 38.5 percent decline expected. Galaxy Entertainment and Sands China elevated 1.6 and 0.5 percent, respectively, but SJM Holdings inched down 0.1 percent.

Nikkei adds 0.2 percent

Japan’s benchmark Nikkei 225 index advanced, setting the stage for a 13th straight session of gains, propped up by the dollar-yen, which traded at 124.79, near its highest level since December 2002.

Among export-oriented stocks, carmakers were firmer, with blue-chip Toyota Motor gaining 0.5 percent.

Utility stocks were also among the top performers in early trade; Chubu Electric Power and Tokyo Electric Power rising 5.1 and 4 percent, respectively.

Takata Corp. — the airbag manufacturer caught at the center of a global recall — said on Monday that it will continue producing air bags that use ammonium nitrate propellant, but will change the design of the air bag inflators. Shares of Takata ticked up 0.2 percent.

ASX loses 1 percent

Australia’s S&P ASX 200 index reversed a briefly higher open to hit a one-week low.

The four major lenders declined ahead of the RBA’s policy decision. National Australia Bank, Westpac and Commonwealth Bank of Australia receded more than 1 percent each, while Australia and New Zealand Banking fell 0.9 percent.

A mixed resources sector also failed to provide the bourse with a headstart. Energy producers Santos and Oil Search slumped 1.9 and 2.7 percent, respectively, as crude oil prices weakened modestly overnight. Among miners, Fortescue Metals advanced 0.8 percent, but global players BHP Billiton and Rio Tinto fell 2.3 and 1.5 percent, respectively.

Kospi drops 0.5 percent

South Korea’s Kospi index widened losses in early trade on the back of steep losses among automakers.

Hyundai Motor and Hyundai Mobis slumped 6.8 and 7.3 percent each, while Kia Motors tanked 4.1 percent following data that showed the country’s auto sales shrank 4.2 percent in May from a year ago period.

The tech sector helped to pare losses, with LG Electronics and LG Display rallying 16 and 2.2 percent, respectively.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Fed’s Fischer: Don’t believe financial crises at end

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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It would be a mistake to believe that financial crises are at an end, Fed Vice Chairman Stanley Fischer said Monday. 

Fischer said it’s unclear if we’re in secular stagnation or a debt supercycle, and warned against complacency bred from financial stability.

“We should not make the mistake of believing that we have put an end to financial crises,” he said at the International Monetary Conference in Toronto. “One reason we should worry about future crises is that successful reforms can breed complacency about risks.”

Fischer also warned against “bankers’ backlash,” but said opposition to regulation is “making headway.”

“But often when bankers complain about regulations, they give the impression that financial crises are now a thing of the past, and furthermore in many cases, that they played no role in the previous crisis,” he said.

He emphasized that individuals should be punished for financial misconduct.

Read More: Why the Fed may be forced to raise rates

It is not clear if government has sufficient tools to prevent all financial crises, he said, and the Fed may need interest rates to prevent financial instability. Fischer did take the opportunity to say econometric evidence shows the Fed’s post-crisis quantitative easing policies worked.

Fischer also said he views the world economy as still growing very slowly, and that “confidence in the financial system and the growth of the economy has been profoundly shaken.”

Turning to the future, Fischer said that the regulated financial industry and the regulators “will have to work very hard, for a very long time, and then keep on working hard, to reduce the frequency and magnitude of those future crises.”

—Reuters contributed to this report.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Market’s next concern may float in South China Sea

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Although recent price action suggests otherwise, a slow-burning geopolitical situation in the South China Sea may yet become a flashpoint for market volatility.

The US is talking tough in the face of mounting evidence of Chinese land grabs and military movements near its neighbors, and Beijing is defiant. The threat of a confrontation between the world’s two largest economies hasn’t registered on traders’ radars, that may change, some say.

“Market mentality has a tendency toward complacency, and right now, geopolitical risk is nowhere on the radar screen. That could be a major mistake,” Chicago-based trader Jim Iuorio warned.

“The developments in China seem to be moving in one direction, and although they may not seem to be a problem now, that could change quickly,” he added.

The topic also found its way into the somewhat rambling remarks last week of former Lehman Brothers CEO Dick Fuld.

Read More:Lehman’s Fuld: No one thing caused the crisis

The disgraced executive, whose firm’s collapse hastened the 2008 financial crisis, folded the conflict into a laundry list of geopolitical worries for stocks.These included Russia’s military encroachments, and the threat of a nuclear Iran.

War ‘inevitable’?

While the South China Sea issue is not new, at the very least, it is beginning to produce some increasingly scary headlines.

A newspaper which often serves as a mouthpiece for the Chinese government threatened last week that war with the US is “unavoidable” unless Washington backs down from its current position.

The specter of war is unlikely to materialize, yet experts are cautioning that tensions could flare up into some form of military engagement.

“Everyone involved realizes that any kind of serious armed conflict over these islands would be a huge disaster, and in no one’s interest,” said Mira Rapp Hooper, director of the Asia Maritime Transparency Initiative at the Center for Strategic and International Studies. “But we should be concerned by the risk of inadvertent or accidental escalation.”

Read More: US defense chief: China island-building erodes security

The islands in question — which are also claimed in part by several countries including Philippines and Vietnam — have seen explosive Chinese land reclamation and infrastructure building in recent years.

The US and its Asian allies have expressed worries that those developments may represent offensive military posturing by Beijing, and that the Chinese may ultimately seek to restrict or even bar free naval passage in the area.

Some countries have also accused China of seeking to exploit the energy resources in the disputed areas. Protests sprung up in Vietnam last May, in response to a Chinese oil rig in what they perceived as their waters.

‘Aggressive’ interference, China tells US

This round of tensions were incited by public revelations the Chinese had been building at a breakneck pace, and that they’d placed military equipment in the area.

Even while admitting that the islands could serve a military purpose, China maintains those actions are well within its territorial rights, and insists the US “is taking a dangerous gamble” with “aggressive” interference.

“We do not want a military conflict with the United States, but if the conflict must come, we should accept it,” an editorial in a Beijing-run newspaper says.

Read More: Asia defense spending: New arms race in South China Sea

Despite Beijing’s charges of an insecure power attempting to humiliate it, the US actions have been appropriate, according to CSIS’s Hooper.

“The US response is representative of the fact that a lot of developments have occurred very quickly and are raising grave concerns among other claimants in the region,” she said.

But tensions are much higher than normal now—Hooper called it “a bit of a crisis feel”—and a misunderstanding between China and a Vietnamese vessel, for example, could readily provoke an international incident, she explained.

Read More: Chinese naval push could affect global trade

Despite all the bluster on both sides, the real threat to stability may be continued lack of understanding.

“We don’t really understand what China’s doing with these islands, we don’t understand what they think their rights are when it comes to these islands, and that could potential lead to a dangerous clash,” Hooper said.

‘Who cares?’

If the situation continues to escalate, the first assets likely to be affected are Asian currencies and Asia-exposed currencies.

“Even though it’s been a story we’ve been hearing about for months, the situation has exacerbated, and the anxiety and uncertainty in the region will hurt the Chinese yuan and the Japanese yen, and possibly the Australian dollar,” predicted currency trader Kathy Lien of BK Asset Management.

Even if military engagement can be avoided, “you may still see sanctions, and sanctions would not be helpful for the Asian currencies,” she explained.

In American markets, further tensions would support a classic “risk-off” move, theoretically hurting stocks, but more directly spurring demand for safe-haven assets such as the US dollar.

“Any kind of tensions there would be dollar-positive and US Treasury-positive,” said Win Thin, global head of emerging markets strategy with Brown Brothers Harriman.

That said, the issue has clearly not yet become a catalyst for the stock-market. In fact, some traders have been outright dismissive of the whole affair.

“Who cares,” Rhino Trading Partners chief strategist Michael Block told CNBC in a curt replied response to an e-mail inquiry.

Indeed, a messy or belligerent outcome is not yet the base case. Jeff Kilburg of KKM Financial told CNBC’s “Futures Now” last week that “the situation needs to escalate a lot more for the market to really get concerned about it.”

But if China and the US shift from rattling their sabers to unsheathing them, markets are much more likely to pay attention.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia stocks down, Shanghai bucks trend

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asia stocks opened lower, trailing losses on Wall Street, and were trading in the negative on Monday morning.

China stocks, however, bucked the regional trend and both the Shanghai and Shenzhen indices were trading over one percent higher at 10:00 a.m Hong Kong/Singapore time.

Trading on the Hang Seng in Chinese broker Huatai, the biggest IPO in Asia so far this year, opened flat.

Earlier, China’s official manufacturing PMI came in at 50.2, in line with forecasts, and rose slightly from April’s 50.1.

The services PMI fell slightly, to 53.2, from 53.4 in April.

A little later, the China final HSBC PMI was released in at 49.2, down for the third straight month.

The 50-mark that demarcates expansion from contraction.

Last Friday, the Dow Jones industrial average ended about 115 points lower after falling more than 150 points during the session, although it still posted a 0.95 percent gain for May. After rallying for the week, the US dollar and Treasuries traded flat on Friday.

For Asian investors, the key events for the day will be China economic data. The government will be releasing its official purchasing managers’ index at 09:00 SIN/HK time. China’s May factory activity is forecast at 50.2, a nudge higher than a tick up from April’s 50.1, but above the 50-mark that demarcates expansion in the manufacturing sector from contraction, according to a Reuters poll of economists.

HSBC’s final PMI reading will be due at 0945 SIN/HK. The preliminary reading released on May 21 came in at 49.1, marking a contraction for the third straight month and indicating a persistent slowdown in the all-important manufacturing sector.

Financial markets in Singapore, Thailand and New Zealand will be closed on Monday for public holidays.

Greece will be back at the top of global investors’ radars this week. The Greek government, elected on an anti-austerity platform, is saying it hopes to reach a reform-for-rescue deal with its international bailout creditors this week, according to Reuters.

A 300 million euro payment is due to the International Monetary Fund on June 5.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow