Titan growing faster than industry each quarter, says CFO Subramaniam

Image result for Titan growing faster than industry each quarter, says CFO Subramaniam

Watches and accessories maker Titan Co reported an 8.34 percent growth in consolidated profit during the July-September quarter. Subbu Subramaniam, CFO of Titan, spoke to CNBC-TV18 about the earnings growth and the company’s business plans going forward.

“The company is growing faster than the industry each quarter,” said Subramaniam.

“The company is now seeing the benefits of ad spends on jewellery in the third quarter,” said Subramaniam, adding that going forward in the second half, the ad spends would be lower. “It was part of the plan to incur higher ad spends in the first half and therefore expected margins to be lower,” he said.

In terms of sales, Subramaniam said, “The company had a very good run up to Diwali, saw 27 percent growth and the retail-end in the first 29 days upto Diwali. Therefore, market share gains continue.”

With regards to the watch business, he said,” The company would spend more on ads in the second half and so expect the EBIT for that business to be in between 15-16 percent for FY19. For the second half, the EBIT margins would be around 12-13 percent in second half because of ad spends.”

“Eyeware is small part of the overall business but it saw a good growth in October. The focus here is more on growing topline, increase network rather than look at profitability,” said Subramaniam.
With regards to IL&FS exposure, he said, “It would be difficult to predict additional provisioning that would be needed. The company has exposure to IL&FS inter-corporate deposits worth Rs 145 crore.”

[“source=cnbc”]

Michigan’s New Governor Can Accelerate The Auto Industry’s Transformation

Michigan Gov.-elect Gretchen Whitmer hosts a post-election news conference, Wednesday, Nov. 7, 2018, in Detroit. (AP Photo/Carlos Osorio)(AP Photo/Carlos Osorio)ASSOCIATED PRESS

My congratulations go out to Gretchen Whitmer for winning my state’s gubernatorial election. The governor-elect – as well as governors across the other 49-states – face many great challenges from health care to infrastructure with significant financial constraints. Of course, with great challenges come great opportunities. Given the significant inflection point the automotive industry is at related to autonomous technology, vehicle electrification and transformational mobility as a service innovation, governor-elect Whitmer has the opportunity to create a business environment in Michigan to maximize the positive returns of these trends while minimizing the transitional costs. Here are a few ideas I would think the Governor-elect should pursue to accelerate these mega-trends. Other governors are free to apply these as applicable.

    1.  Connect-the-dots before initiating-the-new. The State abounds with advanced vehicle technology testing institutes and facilities. The State hosts the American Center for Mobility, University of Michigan’s Mcity, Western Michigan University’s Transportation Research Center for Livable Communities, and Kettering University’s Mobility Research Center to name a few. It is always attractive to bring in new money, start new initiatives and make political headlines.  However, I would suggest we take stock in what we have, reinforce these assets and leverage the collective, current assets to solve industry and public policy problems.
    2. Don’t forget autonomous and electrification touches all forms of transportation. Too often when we talk about transportation and mobility we only think about passenger vehicles – because they are in our garages and we drive them every day. However, the mega-trends of autonomous, electric and mobility as a service need to be integrated into commercial vehicles, rail, air, water and pipeline as goods cross all these forms of transportation and individuals interact with each as well as we optimize how merchandise goes from manufacturer to retailer to customer and, for example, making first- and  last-mile transportation efficient makes mass-rail more efficient. Having the many facilities listed above allows the state to address these varied transportation modes.
    1. Make our Manufacturing USA centers model operations. The industry is on the cusp of a light-weighting and multi-material revolution. Detroit hosts two public-private partnerships under the Manufacturing USA initiative that could, with the right direction, be the epicenter of many industry lightweight innovations. The Lightweight Innovations for Tomorrow (LIFT) and The Institute for Advanced Composites Manufacturing Innovation (IACMI) are not only beginning to run pre-competitive manufacturing projects, but they also have the opportunity to be learning laboratories to teach the most recent manufacturing technology to the next gen labor force.
    2. Engage the finance community equally to industry and labor. In Michigan, it is easy to focus on the manufacturing and labor side of the business and overlook the capital side. The industry has always been a huge consumer of capital.  But, it has been dominated by big business, with big balance sheets and big investment bankers.  The industry’s transformation is going to take a mosaic of funders – from the recent SoftBank Vision Fund investment into GM’s Cruise to corporate and independent venture capital funds and non-distress, private equity (the auto industry is very familiar with the PE firms focused on distressed turnarounds). The state must be a welcome environment for all these forms of capital, including our traditional commercial bankers.

 

[“source=cnbc”]

A US pivot to Europe would boost the economy and national security

French President Emmanuel Macron welcomes U.S. President Donald Trump for bilateral talks at the Elysee Palace in Paris on Nov. 10, 2018.

The sales of American goods to Europe — nearly a quarter of the total — are three times larger than sales to China. That’s shown by the U.S. trade numbers for the first nine months of this year.

Over that period, American exports to Europe were soaring at an annual rate of 13 percent, while sales to China were marking a mere 3.2 percent increase from the nine months of last year.

But the most important difference is this: The U.S. trade deficit with China was more than double the American trade gap with Europe.

One could take that a bit further. U.S. export sales to Europe in the first three quarters of this year were growing twice as fast as those to the entire Pacific Rim.

Not bad for that oft-derided “sclerotic” Europe holding its own — and then some — with the Pacific Rim tigers free-riding on their huge, and growing, U.S. trade surpluses. In fact, the Pacific Rim countries accounted for 60 percent of America’s total trade deficit in this year’s January-to-September interval.

Europe is open

Those numbers may surprise some as an entirely counter-intuitive outcome because one would normally expect the U.S. exports to China, and the rest of the Pacific Rim, to grow much faster than American sales to Europe.

Why? Simply because the Pacific Rim economies are growing at a rate of 5 percent — with China marking a 6.7 percent growth in the first three quarters of this year — while Europe is barely eking out 2 percent GDP growth.

In spite of that, the U.S. is doing much better in the slow-growing European markets than in the strongly expanding markets routinely called by raving observers as the “future of the world economy.”

What’s the problem? Why is the U.S. taking a beating in markets where it should be making a mint?

Here is a thought: Isn’t that part of what U.S. President Donald Trump never tires of calling a “rip-off” of the U.S. economy? A decades-old outrage neglected and tolerated by Washington?

And does that strike you like something Trump is trying to stop and reverse with his “free, fair and reciprocal trade” amid a chorus of catcalls — led by official international organizations richly funded by Washington — that he is killing the so-called “free and multilateral” trading system?

The answer seems clear. The U.S. is selling more to the lackluster European economies than to the Pacific Rim — those “dynamic” Asian economies — because the European markets are much more open and accessible to American companies.

So, the trade policy conclusion for Washington should be a proverbial “no brainer.” Just tweak a few things with Europeans to even out the playing field. The Pacific Rim, however, is an entirely different story.

That’s where the U.S. needs a root and branch review of tariff and non-tariff trade barriers, trade practices, comity and basic rules of reciprocity.

Germany should not destabilize Italy

Hopefully, there is enough bipartisanship left in Washington to support such vitally important trade policy changes initiated by the present administration.

Meanwhile, there are things the White House can do on its own.

For example, Washington should stop Germany from repeating a Greek tragedy in Italy. Unless that is done forthwith, there is no sense for the U.S. to foot three quarters of a bill for the largest military and political alliance the world has ever known.

The U.S. economic and financial authorities know everything they need to know about the Italian budget for 2019 — an entirely appropriate counter-cyclical fiscal policy well within the euro area budget rules. But Germany, with France in tow, seems hellbent on using its own reading of that budget as a pretext for destroying the Italian economy and its democratically elected government. That is a pathetic example of how far the sinking governing elites are ready to go to fight their opponents in the elections to the European Parliament scheduled for May 2019.

Washington has been there before. In July 2015, the U.S. helped France keep Greece in the euro area, saving that long-suffering country from economic and political destruction. Working together, Washington and Paris squashed the German plan for throwing Greece out of the monetary union.

One can now see how important it was to keep Greece functioning. The Greeks are hosting huge assets of a U.S.-led alliance controlling the Eastern Mediterranean and battlefield operations in the Middle East.

Italy is equally central to U.S. national security. The country has many allied military installations, with command headquarters in Naples and a new hub in Sicily covering the Mediterranean, North Africa, Middle East and most of the Balkans. None of that is compromised by Italy’s right-of-center government. On the contrary, Italy remains an unquestionably loyal alliance member.

Apart from the urgent task of shielding the military alliance from German mischief, the U.S. should also nudge Berlin toward a more balanced economic growth that would benefit its euro area partners and expand European markets for American goods and services.

Investment thoughts

“Don’t neglect Europe” could have been an echo of history that Trump was hearing while visiting the American Military Cemetery and Memorial on Mont Valérien in one of the western suburbs of the French capital on Sunday.

But the “strong Europe” he says he wants needs some work. Arguably, trade problems should be the easiest part. Their solution can be readily found in the family of nations sharing the same values and social foundations.

On economic policies, it is essential to ween Germany off its selfish and excessive export gravy train. Living so grandly off its closest friends and partners should finally give a pause for thought to German leaders — an injunction repeatedly proffered by Germany’s former go-to Chancellor Helmut Schmidt.

A significant adjustment to Germany’s traditional export-led growth would give Washington better balanced trade accounts, it would strengthen America’s presence in Europe, and it would pave the way for a deeper trans-Atlantic economic and political integration.

The Pacific Rim is a much more complicated story. After the last week’s conference with China’s high-level emissaries, Washington should have no illusions about any meaningful breakthroughs in diametrically opposed U.S.-China economic, political and security relations.

[“source=cnbc”]

Japan’s prime minister calls for public works spending program to help lift the economy

Japanese Prime Minister Shinzo Abe at a press conference at the Kremlin on May 26, 2018 in Moscow, Russia.

Japan’s Prime Minister Shinzo Abe called on Monday for a new public works spending program to stimulate the economy amid growing concerns about global risks.

The spending, which is expected in the first half of next fiscal year starting in April, will focus on strengthening infrastructure to withstand earthquakes and frequent flooding, according to a presentation made at the Council on Economic and Fiscal Policy (CEFP).

Some of Japan’s top government advisors also called for stimulus to offset a decline in consumption expected after an increase in the nationwide sales tax in October next year.

The rush to approve public works spending and other measures to support consumption highlights growing concern among policymakers about the economy.

“The prime minister asked me to take firm measures to ensure that our economic recovery continues,” Economy Minister Toshimitsu Motegi said at the end of the CEFP meeting.

“He also said the public works spending program expected at the end of this year should be compiled with this point in mind.”

Japan’s economy is forecast to contract in July to September, and a recent slump in machinery orders suggests any rebound in the following quarters is likely to be weak if exports and business investment lose momentum.

Government ministers will compile a preliminary public works plan by the end of this month and then submit a final version of the plan by year’s end, according to documents used at the CEFP meeting.

Members of the CEFP did not say how large spending should be or how the government should fund the package. At the meeting Abe said compiling the package has become an urgent matter, according to a government official.

Japan’s government is considering a 10 trillion yen ($87.77 billion) stimulus package to offset the impact of a sales tax hike next, sources told Reuters last week, as concerns about consumer spending and the global economy grow.

Increasing spending on public works started to gain support after a strong earthquake in September caused a blackout in the northern island of Hokkaido and a series of typhoons damaged transport infrastructure in western Japan.

The advisers on the CEFP are academics and business leaders who are considered close to Abe, so their recommendations often influence policy decisions.

The CEFP met earlier on Monday to debate consumer prices and fiscal policy, which is where the advisers made their recommendations.

The advisers did not lay out the specific steps the government should take to stimulate consumption, but government officials have previously said they are considering shopping vouchers for low-income earners and more spending on public works.

The nationwide sales tax is scheduled to rise to 10 percent in October 2019 from 8 percent currently.

The government already plans to exempt food and some daily goods from the tax hike to soften the blow, but there is still a lot of concern that the tax hike will wreck consumer spending and sentiment. The economy was tipped into a recession the last time the tax was raised in 2014.

Advisers at the CEFP meeting also threw their support behind the government’s plan to encourage mobile phone carriers to lower smartphone fees, saying they hoped the move would increase households’ disposable incomes.

[“source=cnbc”]

Germany’s economy is getting hammered by the rest of the world’s problems

thumbs down germany

A US trade war, Brexit, Italy — you name it, Germany’s economy is suffering from it.

Europe’s economic powerhouse is in one of the longest boom phases of the postwar period, but it’s being pounded by a cocktail of international events that ING Economics says is casting doubts on future growth.

Germany’s Council of Economic Experts also paints a not-so-rosy picture: It expects 1.6% growth for the country this year and only 1.5% in 2019, well below expectations and down from a bumper 2.2% in 2017. Geopolitical issues were at the forefront of the council’s findings.

“The uncertain future of the global economic order and demographic change present the German economy with major challenges,” the council’s chairman, Christoph M. Schmidt, said in a report published Wednesday. “That is why we are faced with important economic policy decisions.”

Trade-war fears, ongoing Brexit negotiations, and the continued crisis surrounding Italy’s budget are all dragging on the German economy. That’s not all: “Temporary production-related problems and capacity bottlenecks are dampening the pace of expansion,” the report said.

Europe’s largest exporter has also seen trade out of the country fall dramatically, with exports dropping 0.8% month-on-month in September. Exports could continue to suffer in the event of a no-deal Brexit or new tariffs on autos out of the US as part of US President Donald Trump’s trade war. Export numbers dropped in four of the past six months and business confidence has been waning as investment opportunities weaken on geopolitical uncertainty, ING said.

Automakers are suffering, too

Germany’s malaise dampened the results of auto giants such as BMW. Third-quarter operating profit plunged 27% amid greater competition in global markets. The Financial Times reported Wednesday that new European Union greenhouse-gas emissions targets for automakers — the EU seeks to reduce emissions by 30% — are behind a 0.1% contraction in Germany’s gross domestic product in the third quarter as car companies struggle to adapt.

In addition, potential Trump tariffs on China are a major issue for Daimler and BMW, which both build SUVs in the US for the Chinese market.

Researchers from UBS say economic risks are predominantly external but warn that deteriorating labor-market conditions could have an impact. The country’s aging population could also prove to be problematic going forward unless more immigration and improved working flexibility are encouraged across the German economy, according to the economic council.

[“source=cnbc”]

China says exports to US rising ‘because American economy is strong and they want to buy our products’

China’s exports to the United States are still growing, thanks to a strong American economy and consumers’ preference for Chinese products, China’s ministry of commerce said on Monday.

The delivery of previously placed orders and “front-loading” by Chinese shippers also contributed to a robust performance so far this year, the ministry concluded in a report reviewing and forecasting China’s trade performance.

As such, the impact of the US trade war on China’s trade and broad economy will be “limited” with “total risks under control”, the ministry concluded in the report.

“The United States unilaterally provoked economic and trade friction, which not only affects Sino-US trade but has also brought significant uncertainties to the development of global trade and investment,” the ministry said.

China’s exports to the US rose 13.3 per cent in the first 10 months compared with a year earlier while its imports from the US increased by 8.5 per cent in the same period, according to China customs data. In October alone, Chinese exports to the US rose by 13.2 per cent while its imports from the US fell 1.8 per cent, earning Beijing a trade surplus of US$32 billion last month.

According to Beijing’s commerce ministry, strong demand for imported products in the US – the result of low unemployment, robust growth and good consumer confidence – is a fundamental factor helping China to sell to the US despite tariffs imposed by US President Donald Trump.

In addition, the industrial chains of China and the US are “closely integrated” and the two countries’ economic structures are “highly complementary”, the ministry added.

The US imposed 10 per cent tariffs on US$200 billion worth of Chinese products in late September – a rate set to rise to 25 per cent in January if Beijing does not make concessions.

The measures followed an initial round of tariffs on US$50 billion worth of products.

China has responded in a tit-for-tat manner by imposing tariffs on US imports.

While China’s export data looks solid for now, many economists said the impact of the trade war would start showing up in the first or second quarter of next year, adding to the woes of an economy that is already growing at its slowest pace in a decade.

China’s trade ministry also said that the country “faces both severe challenges and presents new development potential” next year and that the ministry would work hard to ensure a “steady” trade situation.

President Xi Jinping is set to meet Trump at the G20 leaders summit in Argentina next month in the hope of easing trade tensions.

Speaking at China’s first imports expo in Shanghai last week, Xi said China would buy more goods and services from abroad, saying the country’s purchases of foreign goods would be worth US$30 trillion over the next 15 years.

Xi also announced the country would buy US$10 trillion worth of foreign services in the same period.

Analysts expect the trade war will see China importing more from other countries as it reduces tariffs. However, China’s growth is likely to slow further in the coming months as the trade war takes its toll.

In response – amid signals that policymakers are increasingly nervous about the outlook –, the government has launched a series of measures to support the economy, including cutting individual taxes, speeding up infrastructure spending and extending additional financing options to help struggling smaller companies.

China’s exports to the United States are still growing, thanks to a strong American economy and consumers’ preference for Chinese products, China’s ministry of commerce said on Monday.

The delivery of previously placed orders and “front-loading” by Chinese shippers also contributed to a robust performance so far this year, the ministry concluded in a report reviewing and forecasting China’s trade performance.

As such, the impact of the US trade war on China’s trade and broad economy will be “limited” with “total risks under control”, the ministry concluded in the report.

“The United States unilaterally provoked economic and trade friction, which not only affects Sino-US trade but has also brought significant uncertainties to the development of global trade and investment,” the ministry said.

China’s exports to the US rose 13.3 per cent in the first 10 months compared with a year earlier while its imports from the US increased by 8.5 per cent in the same period, according to China customs data. In October alone, Chinese exports to the US rose by 13.2 per cent while its imports from the US fell 1.8 per cent, earning Beijing a trade surplus of US$32 billion last month.

According to Beijing’s commerce ministry, strong demand for imported products in the US – the result of low unemployment, robust growth and good consumer confidence – is a fundamental factor helping China to sell to the US despite tariffs imposed by US President Donald Trump.

In addition, the industrial chains of China and the US are “closely integrated” and the two countries’ economic structures are “highly complementary”, the ministry added.

The US imposed 10 per cent tariffs on US$200 billion worth of Chinese products in late September – a rate set to rise to 25 per cent in January if Beijing does not make concessions.

The measures followed an initial round of tariffs on US$50 billion worth of products.

China has responded in a tit-for-tat manner by imposing tariffs on US imports.

While China’s export data looks solid for now, many economists said the impact of the trade war would start showing up in the first or second quarter of next year, adding to the woes of an economy that is already growing at its slowest pace in a decade.

China’s trade ministry also said that the country “faces both severe challenges and presents new development potential” next year and that the ministry would work hard to ensure a “steady” trade situation.

President Xi Jinping is set to meet Trump at the G20 leaders summit in Argentina next month in the hope of easing trade tensions.

Speaking at China’s first imports expo in Shanghai last week, Xi said China would buy more goods and services from abroad, saying the country’s purchases of foreign goods would be worth US$30 trillion over the next 15 years.

Xi also announced the country would buy US$10 trillion worth of foreign services in the same period.

Analysts expect the trade war will see China importing more from other countries as it reduces tariffs. However, China’s growth is likely to slow further in the coming months as the trade war takes its toll.

In response – amid signals that policymakers are increasingly nervous about the outlook –, the government has launched a series of measures to support the economy, including cutting individual taxes, speeding up infrastructure spending and extending additional financing options to help struggling smaller companies.

[“source=cnbc”]

EMERGING,MARKETS-Emerging,currencies,slide,on,higher,oil,,strong,dollar

Image result for EMERGING MARKETS-Emerging stocks and currencies fall as Fed stays hawkish

MSCI currency index on track for worst day in over a month

* Turkish lira biggest loser among EM currencies

Nov 9 (Reuters) – Emerging market shares and currencies fell to their lowest in a week on Friday, tracking a global downturn in sentiment after the U.S. Federal Reserve reaffirmed its stand on tightening monetary policy, strengthening the dollar.

A string of rate hikes by the Fed has sucked money out of emerging markets this year, and, with another rise priced in for December, currencies across the developing world are likely to weaken further.

“It is generally a bit of a risk off day today. Markets were expecting a hike in December and there hasn’t been any significant shift in their (Fed) stance,” aid Paul Fage, senior emerging markets strategist at TD Securities.

“EM is going to take its cue from what euro/dollar is doing,” added Fage. The euro was 0.26 percent lower against the dollar.

The emerging market currencies index was down 0.5 percent, on track for its worst day in over a month with the Turkish lira leading losses, down 0.8 percent after the Turkish treasury canceled bond issues for next week due to savings measures.

The South African rand also weakened, down 0.7 percent, giving back gains from earlier this week, as investors took profits and awaited the next market catalyst.

The MSCI’s benchmark emerging equity index fell 1.5 percent with Chinese equities falling for their fifth-straight session.

Over the week, mainland China stocks were weighed down by a mix of weak data, rising pressure on financial companies and concerns of a new board in Shanghai disrupting the already weak A-share market amid looming trade tensions with the U.S.

Hong Kong faced its worst intra-day fall in over two-weeks, down 2.4 percent.

Stocks in Russia declined more than one percent led by energy stocks, while Johannesburg’s blue chips fell for the second consecutive day.

The Polish zloty was on pace to post its biggest weekly decline since late September, while Hungary’s forint clocked weekly loses for a second straight week.

Hungarian Prime Minister Viktor Orban on Friday said the country must be cautious about adopting the euro and should remain open towards other parts of the world.

The Czech Koruna fell 0.2 percent as data showed the consumer price rise in October to be below forecast but in line with the central bank’s target.

For GRAPHIC on emerging market FX performance 2018, see http://tmsnrt.rs/2egbfVh

For GRAPHIC on MSCI emerging index performance 2018, see https://tmsnrt.rs/2OusNdX

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see (Reporting by Agamoni Ghosh and Susan Mathew in Bangalore, Editing by William Maclean)

[“source=cnbc”]

EMERGING MARKETS-LatAm stocks post worst week in three months, currencies dip

Image result for EMERGING MARKETS-LatAm stocks post worst week in three months, currencies dip

updates stock and currency prices, adds quote) Nov 9 (Reuters) – Latin American stocks recorded their worst weekly performance in three months on Friday, with muted sentiment toward Mexico persisting a day after a senator’s proposal to cap and eliminate certain banking commissions. The proposal has tarnished investor sentiment toward Mexican President-elect Andres Manuel Lopez Obrador’s government, which has yet to take office, despite his signaling on Friday he would not support the bill. The proposal comes less than two weeks after an already started airport megaproject was scrapped following a public consultation. The MSCI index of Latin America stocks fell 0.7 percent on the day, which combined heavy losses in the previous three sessions consigned it to a 3.7 percent drop for the week. While Mexico’s benchmark stock index was little changed after retracing heavy intraday losses following Lopez Obrador’s statement on the banking bill, sentiment toward banking shares remaining cautious. Grupo Financiero Banorte SAB de CV lost 1.8 percent on the day. “The (senator’s) bill adds to the perception of market unfriendliness of the new administration, coming shortly after the airport cancellation,” wrote Dirk Willer, managing director and head of emerging market strategy at Citigroup, in a client note. “We have a bearish bias over the medium term, as (Lopez Obrador) has promised to hold more referendums, possibly over energy reform.” Mexico’s peso firmed about 0.5 percent, making up a fraction of its 1.6 percent slide on Thursday. The country’s central bank has its next meeting scheduled in less than a week’s time. Juan Carlos Alderete, a senior economist for Mexico with Banorte said he expects the central bank to raise rates by 25 basis points to 8 percent, citing factors including higher upside risks to inflation and the high volatility involved in the peso’s recent weakness. Regional foreign exchange markets fared only slightly better, but a firming in Brazil’s real on incoming President Jair Bolsonaro’s comments on pension reform held the MSCI index of Latin America currencies from declining more than 0.6 percent. The right-wing politician said he would like to see some form of pension reform, much watched for among investors, passed this year to make it easier to deal with the fiscal deficit after he takes office on Jan. 1, 2019. The Bovespa index was flat as gains among financial stocks were largely negated by losses in materials with iron ore miner Vale falling 4.2 percent. In Argentina, the peso firmed about 0.2 percent, with traders ascribing the modest move to the central bank adjusting minimum cash balances to curb speculation in the currency.

However, local stocks fell about 2.7 percent on broad-based losses, as the overhang of a decline on Wall Street sent the benchmark to its lowest in more than a week and a half. Chile’s stocks benchmark fell 0.9 percent, as all but four stocks on the benchmark declined.

[“source=cnbc”]

EMERGING MARKETS-Emerging currencies slide on higher oil, strong dollar

Image result for EMERGING,MARKETS-Emerging,currencies,slide,on,higher,oil,,strong,dollar

Nov 12 (Reuters) – Emerging market stocks and currencies fell on Monday, pressured by a strong dollar and rising oil prices with net crude importers bearing the brunt.

The MSCI index of emerging market currencies fell 0.3 percent as the dollar built on last week’s gains and hit a 16-month high, while oil prices rose by more than one percent on Monday as top exporter Saudi Arabia announced a December supply cut.

This hit currencies of net oil importers such as the Indian rupee and the Turkish lira.

“The recent rebound in oil prices is a reminder that it will become increasingly difficult for twin deficit currencies – rupee, rupiah and peso – to smooth currency volatility via rate hikes without hurting the economy, and through interventions without depleting reserves,” said Stephen Innes, head of Asia Pacific trading at Oanda.

But, the bounce in oil prices lifted the currency and stocks in Russia – a net exporter of oil – with the rouble up 0.6 percent and the Moscow stock exchange index climbed by 0.5 percent aided also by a delay to the imposition of U.S. sanction on aluminium giant Rusal.

“Oil is improving sentiment for the rouble today but there is also another driver for the rouble – Rusal sanctions. Some deadlines were extended by U.S. authorities. And we are not seeing any other negative news related to sanctions,” said Vladimir Miklashevsky, a senior economist at Danske Bank.

The Sri Lankan rupee weakened after dollar-bonds fell as President Maithripala Sirisena dissolved parliament on Friday night and called an election for Jan. 5 in a move that will likely deepen the country’s political crisis.

The Chinese yuan extended losses, after its worst week since July as soft economic data last week showed cooling of the economy, while South Africa’s rand was weaker by 0.3 percent as yield-seeking investors continued to back the dollar.

MSCI’s benchmark emerging equity index was down 0.6 percent, trading at its lowest level this month as exchanges in South Korea, India and South Africa declined.

China mainland stocks , however, shined through, snapping a one-week losing streak boosted by a series of stimulus measures, notably the securities regulator making it easier for companies to buy back shares, possible implementation of large scale tax cuts.

Focus also remains on U.S. Vice-President Mike Pence’s attendance at the Association of South East Asian Nations summit this week, which could see him provide clarity on U.S. intentions for improving trade relations with China.

“Trade is always going to be a concern in the current environment for Asia, as about one third of all global trade goes through the region, and it is slowing, which means slower incomes growth across the region,” said Robert Carnell, chief economist and head of research at ING Asia.

In Eastern Europe, Romania’s leu touched its lowest since May last year as consumer price inflation slowed in October.

[“source=cnbc”]

EMERGING MARKETS-Mexican peso falls most among Latin American currencies

Image result for EMERGING MARKETS-Mexican peso falls most among Latin American currenciesCurrencies in Mexico and Brazil weakened on Monday in line with emerging market currencies elsewhere as the dollar surged to 16-month highs and as concerns on global growth persisted. The euro and pound were weaker due to rising political risk in Italy and Britain, adding to the greenback’s gains from last week when the U.S. Federal Reserve signaled it would stay on its hawkish path. Risk appetite was also pressured by signs of slowing growth in China. The Mexican peso lost the most in the region, down 0.4 percent, while Brazil’s real declined 0.3 percent. The Chilean peso fell 0.3 percent and hit its lowest in a week. Stocks on Brazil’s Bovespa index climbed with energy and material shares leading gains. Financial markets in Colombia were closed for a local holiday.

Key Latin American stock indexes and currencies at 1254 GMT:

[“source=cnbc”]