Crude oil prices traded near their lowest levels since October last year, having dived 8% on Friday for the biggest weekly losses in nearly three years, with rising US production intensifying fears of a supply glut. The rout in crude oil intensified concerns about surging supplies and weak demand growth drove prices sharply lower. In Monday trade, US crude futures fetched $US50.53 per barrel, slightly higher though not far from Friday's low of $50.15. Brent crude futures last stood at $58.99 per barrel, near Friday's low of $58.41. On last Friday, West Texas Intermediate (WTI) futures for January settlement plunged $4.24, or 7.8%, to $50.39 a barrel on the New York Mercantile Exchange, while Brent, the global crude benchmark, fell $3.80, or 6.1%, at $58.80 a barrel in London. So far this month, WTI and Brent futures were down more than 21%, on track for their biggest fall since October 2008.
Markets are also bracing for a crucial meeting between US and Chinese leaders at the end of the week as trade tensions between the economic superpowers showed no signs of easing.
NEWS FROM THE PRESS: Foundry industry income, profit rise -- China's iron and steel industry has maintained solid growth momentum, posting notable rises in both operating income and profits from January to September. Statistics from the Ministry of Industry and Information Technology showed that the industry's total main operating income surged up by 14 percent from the same period last year to 5.66 trillion yuan (US$816.7 billion). The industry's aggregate profit during the period amounted to 358.7 billion yuan, up 65.3 percent year on year. Large-and medium-sized enterprises contributed 3.06 trillion yuan to the total operating income and 230 billion yuan to profits. The two figures marked a rise of 14.5 percent and 86 percent respectively. By the end of September, the debt ratio of large-and medium-sized enterprises dropped by 3.9 percentage points from a year earlier to 66.1 percent. Thanks to the efforts in reducing overcapacity and the production ban on substandard steel, Chinese iron and steel producers have been able to sell their products abroad at better prices. From January to September, China exported steel products of 53.08 million tons, down 10.7 percent year on year, but their aggregate export value has risen 6.1 percent year on year to 298.99 billion yuan. The export price averaged 5,633 yuan per ton, up 18.8 percent from the same period last year. This year, China's steel export was expected to stand around 70 million tons.
Govt. pushes for more reforms in FTZs -- The State Council on Friday unveiled a variety of measures to deepen reforms in free trade zones (FTZs) and stated qualified individuals in them will be allowed to invest in overseas securities under relevant rules. The government has said it will push for more reforms and economic opening, but only at its own pace. Qualified individuals in FTZs will be allowed to invest in overseas securities under relevant rules, said the State Council in a statement. China currently only allows individuals to buy overseas stocks and bonds via limited cross-border investment channels such as the Shanghai-Hong Kong stock connect. Banks in FTZs will also be allowed to conduct yuan derivative businesses on behalf of overseas institutions, while qualified FTZs will be able to launch pilot programs for intellectual property rights securitization, the State Council said. On the non-financial side, the government will allow foreign carriers to offer passenger and cargo services from Zhengzhou and Xi'an, two key FTZs in China, to another country. The government said it would also reduce red tape for auto imports.
More foreign financial firms win market access -- The government has given the go-ahead for two more overseas financial institutions to set up local subsidiaries, China's banking and insurance regulator said in a notice, bringing the total number of approvals to 12. Germany's Allianz Group will be permitted to establish China's first foreign insurance holding company, and Hong Kong-based Chiyu Bank has been approved to set up a branch in Shenzhen, the China Banking and Insurance Regulatory Commission (CBIRC) said. The regulator said it would steadily expand the opening up of China's financial sector, while at the same time improves its risk prevention and supervision capabilities. The banking regulator said it has recently given the go-ahead for Fubon Bank, ICBC-AXA Assurance and the Korean Reinsurance to set up local units. The regulator issued draft guidelines late last year to help promote foreign investment in the financial sector, cutting red tape and creating a level playing field for foreign institutions to set up branches, raise debt and hire senior executives. China earlier this year announced it would allow 51-percent foreign ownership of brokerages and life insurers, with that cap to be removed by 2021. Ownership curbs were also to be eased in other financial industries including banking. Stakes were previously capped at 20-percent for a single foreign institution and 25 percent for a group. Earlier this year, the regulator published revisions to regulations in line with the government's plans to ease restrictions on foreign investment in the country's financial sector.
OFFSHORE MARKET NEWS: Wall Street stocks resumed their downward slide in a holiday-shortened session on Friday (Nov 23) as a sharp drop in oil prices sparked global growth worries. The Dow Jones Industrial Average finished down 0.7% at 24,285.95. The broad-based S&P 500 also shed 0.7% to 2,632.56, while the tech-rich Nasdaq Composite Index slid 0.5% to 6,938.98.
The major European markets turned in a mixed performance on Friday. The U.K.'s FTSE 100 Index edged down by 0.1%, while the French CAC 40 Index rose by 0.2% and the German DAX Index climbed by 0.5%.
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