AIM Connect: Your Latest Investment Updates, Insights and Trends

Photo: Annual Investment Meeting

This week’s latest investment news highlights the current state of major countries around the world. The pandemic has continuously made it challenging for countries to bounce back from the decline in economic performance. On a positive note, countries have started to reopen their markets in the hopes of gradual recovery. Focus now is on regrouping and pushing forward its plans in a COVID-19 existing world.

USA:

  • Record jump in retail sales sends stocks higher, but Fed chief warns economic recovery remains uncertain
  • The United States officially fell into a recession in February, ending a historic 128-month expansion as the coronavirus that swept the country and put the economy into a tailspin.

Asia Pacific:

  • The Asian Development Bank (ADB) sees growth across developing Asia-Pacific falling to a 59-year low largely because of the COVID-19 pandemic, with the Philippines suffering a 3.8 percent drop in gross domestic product (GDP).
  • Indonesia - The government plans to buy products and services from small and medium enterprises (SMEs) for official state procurement, potentially spending over Rp 700 trillion (US$49.7 billion) as part of its efforts to help the sector.
  • South Korea - Shinhan Financial Group subsidiaries are rapidly expanding their presences in the big data business, in line with the nation’s efforts to boost the data economy as part of the Korean New Deal project that was initiated to seek future growth engines.
  • Thailand BOI Approves Over 40 Billion Baht in Large Scale Projects, Commits to Sustainable Investment
  • Singapore - The government will set aside more than SGD20 billion ($14.3bn) to support research in “high impact areas” such as health and biomedical sciences, climate change and artificial intelligence, Deputy Prime Minister Heng Swee Keat said. The investment is part of a five-year research and development plan, which is being finalised.
  • India - The telecoms and digital arm of the Indian conglomerate Reliance Industries Limited (RIL) has raised $15.2 billion in 11 deals over two months amid a worldwide pandemic.

Middle East:

  • The UAE makes a strong return to the Foreign Direct Investment Confidence Index. The country ranks 19th globally in the 2020 Kearney Foreign Direct Investment (FDI) Confidence Index, up from 21st place when it was last represented in the index in 2017
  • ADNOC announced a $20.7 billion energy infrastructure deal in its gas pipeline business, which will bring in $10.1 billion in foreign direct investment to the UAE from a variety of international investors. The deal will be one of the largest global energy infrastructure transactions, with the consortium collectively acquiring a 49% stake in the ADNOC Gas Pipeline Assets.
  • Oil giant Saudi Aramco completes $70bn takeover of SABIC. Aramco will push back the bulk of instalments until after 2022 and delay the final one by three years until 2028
  • Oman steps up plan to build Middle East’s biggest oil-tank farm. Oman Tank Terminal Co. (OTTCO) has almost finished constructing eight tanks to store crude for a new refinery near the town of Duqm on the Arabian Sea
  • Trade between Egypt and China in the first quarter of 2020 reached $3.2 billion, China’s Ambassador in Egypt Liao Liqiang said, adding that a cooperation deal will be signed between the China Import and Export fair held online between June 14-24 and the Egyptian side.
  • Saudi Arabia’s PIF, one of the world’s largest sovereign wealth funds, will invest INR 11,367 crore ($1.5 billion) for 2.32 percent of India’s Reliance Industries (RIL) digital unit, Jio Platforms.

Africa:

  • Uganda - The construction of the Gulu Logistics hub has finally started in Gulu district. The project is being undertaken by Ambitious Construction Limited. The project is valued at US$ 29 million (approximately 107.3 billion shillings) will comprise of a dry port with both rail and truck terminals.
  • South Africa - President Cyril Ramaphosa says government has started a process of implementing an economic recovery plan, which is coupled with preserving the livelihoods of South Africans and saving lives.
  • Commencement of trade under the African Continental Free Trade Agreement (AfCFTA) has been pushed to a tentative date in January next year. The African Union Commission’s original date of July 1 is considered untenable due to the Covid-19 pandemic.
  • Madagscar - President Andry Rajoelina rolled out a total of 280 billion ariary ($73 million) in three loan tranches with interest rates ranging from 4.97% to 9% and repayment periods of 6-24 months
  • Senegal - The construction of the new Akon City will require an investment of $6 billion. The city, which is intended to be environmentally friendly, will be built on an area of 2,000 hectares. KE International has already secured $4 billion for the first and second phase of the project.
  • Nigeria - The International Finance Corporation (IFC), a member of the World Bank Group has announced an investment of up to $100 million in Zenith Bank Plc to help increase support to clients and companies whose cash flows have been disrupted by challenges caused by the COVID-19 pandemic.

Europe:

  • SFAMA is committed to a sustainable economy in Switzerland For the Swiss asset management industry, detailed recommendations for the effective implementation of the corresponding concepts have been developed in collaboration with SSF.
  • Romania: Real estate developer FRI-EL Buildings, part of Italian renewable energy producer FRI-EL Green Power, said it will invest over 80 million euro ($89.8 million) in a residential complex in Romania’s western city of Timisoara
  • The Estonian fintech startup, Planet42, that operates in Africa and focuses on providing access to mobility to the underbanked, has raised USD2.4 million in an investment round.
  • UK inflation hits 4-year low as CPI falls to 0.5 pct in May. Britain’s Consumer Prices Index (CPI) 12-month rate fell to 0.5 percent in May 2020, recording the lowest point since June 2016, the Office for National Statistics (ONS)
  • France: Sanofi will invest more than half a billion euros to create a state-of-the-art vaccine production site (Neuville sur Saône) and a new research center (Marcy-l’Etoile) dedicated to vaccines

Latin America:

  • Mexico - Finance Minister Arturo Herrera has previously said the economy likely shrank by 17% in April and private sector analysts estimate an annual contraction of 10% or more by year’s end.
  • Colombia’s economy contracted 20.06% in April versus the same month last year - its largest fall on record - as the country suffered the fallout of a national coronavirus lockdown, the government’s statistics agency
  • Latin America’s economies, which rely heavily on manufacturing, tourism and mining for growth, have ground to a halt. On June 8, the World Bank forecast the region’s economies to contract by 7.2% in 2020, with Peru and Brazil to decline by 12% and 8%, respectively.
  • Cuba starts easing lockdown but shortages hamper businesses

Australia:

  • Copenhagen Infrastructure Partners (CIP), one of the world’s leading investors in renewable energy projects, including Australia’s first offshore wind project the Star of the South, has launched what it believes is set to become the world’s largest renewable energy fund. CIP announced this week it had reached €1.5 billion ($A2.45 billion) first close on Copenhagen Infrastructure IV, which will aim to underpin between €10-€14 billion (AUD16-AUD23 billion) of renewable energy projects around the globe – including in Australia, North America, Western Europe, and Asia.

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