Daily news - 01.10.2019
Published: 01. 10. 2019


Govt gives up on Adria, carrier files for receivership

The management of the struggling air carrier Adria Airways has filed for receivership, ending a prolonged agony, which also saw the government confirming on Monday that investing into or entering the company was out of the question. The government mentioned the state launching a new airline as one possible scenario following receivership. (STA)

Lek to move antibiotics production from Slovenia to Austria

Lek, the Slovenian subsidiary of Swiss multinational Novartis, has announced phasing out the production of antibiotics in Slovenia's Prevalje in two years' time and moving it to neighbouring Austria. In the meantime, Prevalje will become one of the two locations of Novartis's emerging global centre for technical operations. (STA)


JPM raises euro zone stocks to "overweight", sees bounce back

JPMorgan raised its rating on euro zone equities to “overweight” on Monday, reversing its longstanding preference for U.S. equities, saying the bloc’s battered stocks have been under owned and predicting an opportunity for them to bounce back.
The bank said it would fund the bullish call on euro zone stocks with funding from the U.S., which is being cut to “neutral”.
“We now believe that there is an opportunity for Eurozone to bounce back,” lead equity strategist Mislav Matejka said, adding that current valuation levels present “a good entry point”. (Reuters)

Eurozone inflation slides further below ECB target

Inflation in the eurozone has continued to slide further below the European Central Bank’s target, dropping to its lowest monthly rate for almost three years of 0.9 per cent in September, according to estimates released on Tuesday. (FT)

European factory activity shrinks at most rapid pace since 2012

Europe’s manufacturing slump deepened in September, as a key gauge of factory activity fell to a near-seven year low and industry executives remained downbeat about the year ahead.
The purchasing managers’ index (PMI) for the eurozone fell to 45.7 last month, down from 47 in August and its lowest reading since October 2012.
The final figures, released on Tuesday, were only a marginal improvement on ‘flash’ estimates released in September which knocked the euro and sparked predictions of an imminent recession.
Germany — the eurozone’s export powerhouse which is enduring a prolonged slump that is shaking the region’s factories — saw its reading fall to 41.7, its lowest since June 2009. (FT)

Australia’s central bank cuts interest rates to new all-time low

Australia’s central bank cut interest rates to a new all-time low as the economy grapples with its slowest growth since the global financial crisis.
In a statement on Tuesday, the Reserve Bank of Australia’s monetary policy committee said it would lower the cash rate by 25 basis points to 0.75 per cent. However, it pointed to signs of a “turning point” in the economy, which grew at its slowest pace in a decade in the second quarter amid a slowdown in global growth, a housing market downturn and US-China trade tensions. (FT)

US stocks rise but Nasdaq has first quarterly decline of 2019

Wall Street finished Monday on the front foot but the gains were not enough to save the Nasdaq Composite from its first quarterly decline of the year, while the US dollar hit its highest level since 2017.
The S&P 500 rose 0.5 per cent leaving the benchmark index with a gain of 1.7 per cent for the month and 1.2 per cent for the quarter. Wall Street’s gains were also powered by Apple, which climbed 2.4 per cent after the iPhone maker’s price target was raised by analysts at JPMorgan.
The Nasdaq Composite was up 0.4 per cent leaving the tech-heavy index with a 0.5 per cent monthly gain but a drop of 0.1 per cent for the three month period, its first quarterly decline of the year
The dollar index, a gauge of the buck against a weighted basket of peers, climbed as much as 0.4 per cent to 99.46 — its highest level since May 2017. The buck is up 3.3 per cent over the past three months and eyeing its best quarter since the three months ended June 2018.
Treasuries slid with the yield on the US 10-year up 0.2 basis points to 1.6749 per cent. Yields move inversely to price. Treasuries look set for their worst monthly showing in a year amid a reassessment of the Federal Reserve’s outlook for interest rates. (FT)

WTO lowers global outlook again amid trade conflicts

World trade will grow by 1.2% this year and by 2.7% in 2020, the World Trade Organisation (WTO) said on Tuesday, revising an earlier forecast as trade conflicts between the United States and China weigh on global trade.
“Trade conflicts pose the biggest downside risk to the forecast but macroeconomic shocks and financial volatility are also potential triggers for a steeper downturn,” the WTO said in a statement.
The organization had previously lowered its forecast for trade growth to 2.6% for this year and to 3.0% in 2020.
Britain’s exit from the European Union is also weighing on the global economy, the WTO said, adding that a withdrawal without an agreement could have a significant impact, adding, however, that this would be mostly confined to Europe. (Reuters)


Fiscal Council: Under a review of the Serbian budget, all surplus funds from 2019 will be spent by the end of the year

For the first time since 2014, the government has tabled to the parliament a budget review bill that increases budget expenditures further, the Fiscal Council said in an analysis. At the same time, the Council has prepared an analysis of fiscal and economic trends in 2019 and strategic recommendations for the 2020 budget. In 2019, collection of public revenues was better than expected and, without a budget review, this would result in a slight budget surplus rather than in a planned deficit. With this in mind, the government proposed a review increasing budget expenditures to an extent that will make it possible to end the year as initially planned - with a slight deficit of 0.5% of GDP. (Tanjug)

Another Chinese investor to build factory in Zrenjanin – Investment worth up to EUR 40 million

Serbian Economy Minister Goran Knezevic and representatives of the Chinese company Shandong Yanggu Huatai Chemical, signed a memorandum of understanding in Zrenjanin, based on which the company will invest 30 to 40 million euros in the construction of a factory which will produce raw materials for the rubber industry. Djangar Tudjinof, the marketing director for Europe, spoke on behalf of the company, saying that the main products of Shandong Yanggu Huatai Chemical were rubber chemical products used by the largest world companies. (Ekapija)

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