Rejecting protectionism, ASEAN and Australia commit to free trade

Australian Prime Minister Malcolm Turnbull shakes hands with Cambodia's Prime Minister Hun Sen before their bilateral meeting during the one-off summit of 10-member Association of Southeast Asian Nations (ASEAN) in Sydney, Australia, March 16, 2018. (Reuters)
Updated 16 March 2018
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Rejecting protectionism, ASEAN and Australia commit to free trade

SYDNEY: The Association of Southeast Asian Nations (ASEAN) and Australia reject protectionism and embrace free trade, Australian Prime Minister Malcolm Turnbull and his Singapore counterpart Lee Hsien Loong said on Friday.
“You don’t grow stronger by closing the door to other markets. Protectionism is a dead end. It is not a ladder to get you out of the low growth trap, it is a shovel to dig it much deeper,” Turnbull told a special meeting of ASEAN in Sydney.
“We must face the world, not turn from it. Embrace free trade, not retreat from it,” Turnbull said on day one of the three-day summit.
The anti-protectionism comments come as market sentiment sours with signs of a looming trade war between the United States, China and Europe over US President Donald Trump’s plans to raise tariffs on steel and aluminum imports, and possibly up to $60 billion worth of Chinese imports, targeting technology and telecommunications sectors.
“I know the global mood may be heading in the opposite direction but within ASEAN we are working to deepen and deepen interdependence to work together to open up markets,” said Singapore’s Lee.
Australia is hosting the special ASEAN meeting, despite not being a member of the 10-nation bloc, as it seeks to deepen political and trade ties in the face of China’s rising influence in the region.
Trade is a central topic of the meeting, though human rights and Chinese assertiveness in the region are set to dominate bilateral talks among Australia and ASEAN countries.
Australian Foreign Minister Julie Bishop said she will raise human rights concerns with Myanmar and Cambodian leaders.

CHINA’S RISE DIVIDES ASEAN

Asked whether the ASEAN meeting was a direct counter to China’s growing interest in the region, Bishop said Australia believed the bloc brought it “peace, stability and security.”
“We don’t see it as having a role to balance the powers in the Indo-Pacific but rather be at the heart of the engagement collaboration with other countries,” she told Australian Broadcasting Corp. radio ahead of the opening of the summit.
China claims most of the South China Sea, an important trade route which is believed to contain large quantities of oil and natural gas, and has been building artificial islands on reefs, some with ports and air strips.
Brunei, Malaysia, Vietnam, the Philippines, all of which are members of ASEAN, and Taiwan also have claims in the sea.
Lee acknowledged China’s rise has stoked divisions within ASEAN.
“There is a shift in the global strategic balance, Chinese influence is growing with its economy and strength, and its interest in the region and beyond,” he said.
“There is a range of different perspectives and responses to this shift in the balance among different ASEAN countries.”
Indonesian Defense Minister Ryamizard Ryacudu on Friday said he had lobbied other ASEAN defense ministers to carry out maritime patrols in the South China Sea among efforts to improve regional security.
Other ASEAN countries oppose such operations.

HUMAN RIGHTS

The inclusion of Myanmar leader Aung San Suu Kyi and Cambodia Prime Minister Hun Sen in the meeting has drawn criticism, and large protests are planned against both.
Crimes verging on genocide were being committed against the Rohingya minority in Myanmar, and those crimes bore “the fingerprints of the Myanmar government and of the international community,” the United Nations special adviser on the prevention of genocide said on Tuesday.
Nearly 700,000 Rohingya fled Myanmar after militant attacks on Aug. 25 sparked a crackdown led by security forces in the western Rakhine state that the United Nations and United States have said constituted ethnic cleansing.
“It is in our interest to engage all ASEAN members including Aung San Suu Kyi at this summit because it gives us the best chance of influencing outcomes and making our concerns known, so these are matters that we would be discussing with the Myanmar delegation,” Bishop said.
The United Nations, Western nations and rights groups have decried a crackdown by Hun Sen against his critics ahead of a July general election.
Hun Sen has warned potential protesters against burning effigies of him in Sydney, saying: “I will follow you all the way to your doorstep and beat you right there ... I can use violence against you.”
Asked about the threat, Bishop said Australia was “certainly going to raise our concerns with the Cambodian delegation.”


PIF embraces ‘precision finance’ with diversified debt strategy, says Global SWF

Updated 11 sec ago
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PIF embraces ‘precision finance’ with diversified debt strategy, says Global SWF

RIYADH: Saudi Arabia’s Public Investment Fund is embracing a calibrated, multi-instrument approach to debt issuance described by Global SWF as a model of “precision finance.”

According to the research firm, the purpose — following the issuance of the commercial paper program in June — is to align PIF’s funding tools with investment timelines, liquidity needs, and investor targeting, while reinforcing financial discipline across its expanding portfolio.

In its report, Global SWF noted that PIF is moving away from a singular focus on long-term mega-bond issuances and toward a more agile debt framework that includes commercial paper, sukuk, green bonds, and multi-tranche conventional bonds.

This strategy is designed not just to raise capital, but to do so with precision, which is matching maturities to project lifecycles and diversifying funding sources across global markets.

Global SWF highlighted that PIF’s latest move, completes a full-spectrum debt portfolio that now includes ultra-short to ultra-long maturity instruments.

The commercial paper, issued in US dollar and euro denominations via offshore special-purpose vehicles, secured the highest short-term credit ratings available: Prime-1 from Moody’s and F1+ from Fitch.

These ratings reflect exceptional credit quality and grant PIF access to deep liquidity pools among institutional investors such as money market funds.

The commercial paper program is a critical addition to a borrowing strategy that also includes a $3 billion 100-year green bond issued in October 2022, a $5.5 billion green bond in February 2023, a $3.5 billion sukuk in October 2023, and a series of multi-tranche bonds and sukuk issued through early 2025. 

With each offering, PIF has tailored tenor, currency, and structure to match specific financial and investor objectives.

The evolution of PIF’s financial strategy is closely tied to its broader transformation under Vision 2030. Since 2016, the fund has grown its assets under management from $160 billion to $941.3 billion, according to the latest Vision 2030 Annual Report. It has now increased its 2030 AUM target to $2.67 trillion, reflecting its expanded mandate and rising international profile.

PIF’s investment strategy is balanced between domestic development and global positioning. About 40 percent of its assets are allocated to Saudi-based companies and projects, while the remaining 60 percent target international sectors such as technology, logistics, mining, and tourism.

According to the Vision 2030 report, PIF’s initiatives have helped create 1.1 million jobs, attracted over $37 billion in private capital, and grown the number of PIF-established companies from 45 in 2021 to 93 in 2024.

A strategic departure from Gulf norms

While other sovereign wealth funds such as Norway’s NBIM remain entirely debt-free, and Singapore’s Temasek or China Investment Corporation borrow sparingly, PIF has opted for a hybrid model, one that combines government equity injections with strategic use of debt instruments.

According to Global SWF, this is not a matter of opportunistic borrowing. Rather, PIF is practicing deliberate asset-liability matching which focuses on issuing long-dated bonds to support giga-projects like NEOM or The Line, while using short-term debt for working capital needs and market-timed investments.

Sukuk offerings help tap into regional Islamic finance liquidity, and green bonds target environmental, social, and governance-focused global capital.

This differentiated approach allows PIF to broaden its investor base while keeping funding costs aligned with the nature and duration of its projects.

Why ratings matter

The fund’s credibility is bolstered by strong long-term credit ratings: Aa3 from Moody’s and A+ from Fitch. This has allowed it to secure favorable terms on successive bond offerings and confirmed that PIF is regarded as an exceptionally low-risk short-term borrower, giving it seamless access to institutional liquidity globally.

Global SWF emphasized that the ratings, combined with diverse issuance formats, position PIF among a small group of sovereign wealth funds with the internal capability to manage complex, multi-layered debt programs.

Saudi Arabia is currently navigating a tighter fiscal environment, with a projected 2.3 percent budget deficit in 2025 and a more disciplined approach to public spending.

In this context, PIF’s access to capital markets is more than just financial, according to Global SWF, it serves as a strategic bridge that enables ongoing project execution without placing undue pressure on state reserves.

The firm noted that the fund’s recent bond and sukuk calendar illustrates a sequenced and diversified funding plan, rather than reliance on a single issuance type. This is especially important as global interest rates remain volatile and investors increasingly scrutinize sovereign debt sustainability.

Rather than treating debt as a one-off tool, the fund is deploying it systematically, by tenor, purpose, and investor group, to support a $2.6 trillion vision for economic diversification and global investment leadership.

As the Kingdom approaches the final stretch of Vision 2030 implementation, PIF’s capital strategy offers a case study in how sovereign wealth funds can combine financial discipline, market sophistication, and national ambition under a unified financing framework.


Gold set for second weekly loss; US inflation data in focus

Updated 44 min 25 sec ago
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Gold set for second weekly loss; US inflation data in focus

BENGALURU: Gold declined on Friday and was headed for a second straight weekly loss, as the Israel-Iran ceasefire deal and progress on a US-China trade agreement dampened safe haven demand, while investors awaited the US inflation data.

Spot gold slipped 1.2 percent to $3,288.55 per ounce as of 9:43 a.m. Saudi time. Bullion has lost 2.3 percent this week.

US gold futures fell 1.4 percent to $3,300.40.

“The market is looking quite optimistic for the risky assets, so that’s weighing on gold prices,” said ANZ Commodity Strategist Soni Kumari.

De-escalation in the Middle East after the ceasefire and the progress in US-China trade talks are diminishing uncertainty from the market, sending prices further down, Kumari added.

Iranians and Israelis have welcomed a return to normal life after 12 days of the most intense confrontation ever between the countries and a ceasefire that took effect on Tuesday.

Meanwhile, the US has reached an agreement with China on how to expedite rare earth shipments to the US, a White House official said on Thursday, amid efforts to end a trade war between the world’s two biggest economies.

Investors are awaiting the US Core Personal Consumption Expenditure data at 3:30 p.m. Saudi time for further insight into the Federal Reserve’s policy path, with analysts polled by Reuters forecasting a 0.1 percent monthly increase and a 2.6 percent annual rise.

Markets are currently pricing in a 63-basis-point rate cut this year, starting September.

US President Donald Trump says that tame inflation means the Fed should already be reducing its policy rate, but only two Fed policymakers to date have embraced the possibility of a rate cut at the central bank’s July meeting.

Spot silver fell 0.5 percent to $36.44 per ounce and platinum lost 2.8 percent to $1,378.18, after hitting its highest in nearly 11 years. Palladium gained 0.3 percent to $1,135.36, the highest since October 2024.


Oil Updates — crude set to log steepest weekly decline in 2 years as war premium vanishes

Updated 27 June 2025
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Oil Updates — crude set to log steepest weekly decline in 2 years as war premium vanishes

  • Brent, WTI down 12 percent this week, most since March 2023
  • No major supply disruption from Mid-East crisis, analysts say

SINGAPORE: Oil prices headed for their steepest weekly decline since March 2023 on Friday, as the absence of significant supply disruption from the Iran-Israel conflict saw any risk premium evaporate.

Brent crude futures rose 35 cents, or 0.52 percent, to $68.08 a barrel by 7:29 a.m. Saudi time while US West Texas Intermediate crude gained 40 cents, or 0.61 percent, to $65.64.

That put both contracts on course for a weekly fall of about 12 percent.

The benchmarks are now back at the levels they were at before Isreal began the conflict by firing missiles at Iranian military and nuclear targets on June 13.

This week began with prices hitting a five-month high after the US attacked Iranian nuclear sites at the weekend, before slumping to their lowest in over a week on Tuesday when US President Donald Trump announced an Iran-Israel ceasefire.

At present, traders and analysts said they could see no material impact from the crisis on oil flow.

“Absent the threat of significant supply disruption, we still view oil as fundamentally oversupplied, with our 2025 balances indicating a roughly 2.1 million barrels per day (bpd) surplus,” Macquarie analysts wrote in a research note on Thursday.

The analysts forecast WTI to average around $67 a barrel this year and $60 next year, raising each forecast by $2 after factoring in a geopolitical risk premium.

Small gains in prices later in the week came as US government data showed crude oil and fuel inventories fell a week earlier, with refining activity and demand rising.

“The market is starting to digest the fact that crude oil inventories are very tight all of a sudden,” said Phil Flynn, senior analyst with the Price Futures Group.

Also supporting prices was a Wall Street Journal report saying Trump planned to choose the next Federal Reserve chief earlier than usual. That fueled fresh bets on US interest rate cuts which would typically stimulate demand for oil.


Pakistani stocks decline by 715 points over profit-taking after two days of gains

Updated 26 June 2025
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Pakistani stocks decline by 715 points over profit-taking after two days of gains

  • KSE-100 Index closes at 122,046.46 points, witnessing a decline of 0.58 percent, as per stock market data
  • Profit-taking driven by fiscal year-end considerations, short-term portfolio rebalancing, says financial analyst

ISLAMABAD: The Pakistan Stock Exchange (PSX) witnessed a bearish trend on Thursday after two days of gains, losing 715.18 points to close at 122,046.46 points, which a financial analyst attributed to profit-taking driven by fiscal year-end considerations.

The PSX closed at 122,046.46 points when trading ended on Thursday, witnessing a negative change of 0.58 percent. The KSE-100 had closed at 122,761.64 points on Wednesday and before that on Tuesday, it surged by 6,079 points or 5.23 percent to close at 122,246 points. Analysts attributed the surge on Tuesday to the ceasefire announcement between Iran and Israel.

As many as 473 companies transacted their shares in the stock market on Thursday, with 200 of them recording gains and 237 sustaining losses, state-run Associated Press of Pakistan (APP) said, adding that the share price of 36 companies remained unchanged.

“After two consecutive sessions of strong gains, the local bourse witnessed a round of profit-taking today, driven by fiscal year-end considerations and short-term portfolio rebalancing,” Maaz Mulla, the vice president of equity sales at Topline Securities Limited, said in a statement.

Mulla said the benchmark KSE-100 index saw a “volatile ride“— climbing 656 points intraday before losing 715 points at close of business. He said the closing figure of 122,046 points reflected “a cautious investor mood” as the quarter draws to a close.

He said despite the decline at the end of the day, the overall market activity remained “vibrant.”

“Total traded volume clocked in at 750 million shares, with a traded value of PKR 29.8 billion,” Mulla said.

APP reported that the three top trading companies on Thursday were Pak Int. Bulk with 37,503,501 shares traded at Rs 8.52 per share, WorldCall Telecom with 33,285,442 shares at Rs 1.45 per share and Pervez Ahmed Co. with 32,962,174 shares at Rs 3.29 per share.


IMF raises Saudi growth forecast to 3.5% for 2025, outstripping global average

Updated 26 June 2025
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IMF raises Saudi growth forecast to 3.5% for 2025, outstripping global average

  • IMF highlighted pivotal role of Vision 2030 mega projects in sustaining Kingdom’s economic momentum
  • It projects Saudi economic growth will outpace global average of 2.8% in 2025

RIYADH: The International Monetary Fund has revised up its forecast for Saudi Arabia’s economic growth in 2025, raising it to 3.5 percent from the 3 percent projected in April.

In its concluding statement following an Article IV consultation, the IMF highlighted the pivotal role of Vision 2030 mega projects in sustaining the Kingdom’s economic momentum, noting its continued resilience amid lower oil prices and shifting international challenges.

The IMF projects Saudi economic growth will outpace the global average of 2.8 percent in 2025, as well as outstripping most of its Gulf peers.

“Robust domestic demand — including from government-led projects — will continue to drive growth despite heightened global uncertainty and a weakened commodity price outlook,” the IMF stated in its new report. 

The fund expected this momentum, supported by the scheduled phase-out of OPEC+ production cuts, to push growth even higher to 3.9 percent in 2026 before stabilizing around 3.3 percent in the medium term.

The Saudi Ministry of Finance welcomed the IMF’s concluding statement, highlighting its confirmation of “the strong resilience of the Saudi economy in the face of global economic shocks, supported by the expansion of non-oil sector activities, containment of inflation, and a historically low unemployment rate — all aligning with the objectives of Saudi Vision 2030.”

The ministry noted the IMF’s praise for the government’s efforts to enhance public finance sustainability and resilience to shocks, as well as its recognition that strong domestic demand continues to support economic growth despite global uncertainty, reflecting the Kingdom’s continued implementation of Vision 2030 projects.

Non-oil gross domestic product growth, a key indicator of diversification success, is projected to grow at 3.4 percent in 2025. 

While slightly lower than the 4.2 percent achieved in 2024, the IMF attributed this sustained performance to “continued implementation of Vision 2030 projects through public and private investment, as well as strong credit growth, which would help sustain domestic demand and mitigate the impact of lower oil prices.” 

Medium-term non-oil growth is expected to approach 4 percent by 2027 before stabilizing at 3.5 percent by 2030.

The IMF also noted positive developments in the labor market and inflation. The unemployment rate for Saudi nationals fell to a record low of 7 percent in 2024, surpassing the original Vision 2030 target.

Headline inflation, despite a small rise to 2.3 percent in April, remains contained. 

“Inflation would remain anchored around 2 percent, supported by a credible peg to the US dollar, domestic subsidies, and an elastic supply of expatriate labor,” the fund projected.

On fiscal policy, the IMF deemed the anticipated higher spending in 2025, leading to a deficit above budget targets, as “appropriate.”

“Given the upfront adjustment and ample fiscal buffers available, staff believes that additional spending restraint in 2025— triggered by lower-than-budgeted oil prices— is not necessary as it would make fiscal policy procyclical and exacerbate the impact on growth,” the statement added.

However, it emphasized the need for gradual fiscal consolidation over the medium term, recommending measures like non-oil revenue mobilization, removing energy subsidies, and rationalizing spending.

The IMF highlighted the banking sector’s resilience but cautioned about the risks associated with strong credit growth. “Addressing strong credit growth and associated funding pressures would help mitigate risks to systemic financial stability,” the report urged. 

It welcomed the Saudi Central Bank’s recent introduction of a countercyclical capital buffer and ongoing efforts to enhance regulatory frameworks.

The fund strongly emphasized the need for continued structural reforms. “The current environment of heightened uncertainty underscores the importance of continued structural reform efforts to sustain non-oil growth and economic diversification,” the statement concluded.

It added: “The reform momentum should continue irrespective of oil price developments.” 

This includes strengthening anti-corruption frameworks, enhancing human capital, improving access to finance, fostering digitalization, and deepening capital markets.