DSE News in Brief-(6-6-2018)

China economic

restructuring

gathers pace

BEIJING, June 05: China's economic restructuring is picking up pace, with its manufacturing sector showing signs of a shift to higher value-added areas - a credit positive, analysts at Moody's Investors Service said on Tuesday. China has been cutting excess capacity in heavy industry in recent years to revive profitability in the sector and reduce high debt levels, while encouraging factories to shift to higher-value production such as robotics and aerospace under its Made in China 2025 initiative. "If such measures lead to a reallocation of labour and capital resources that shift credit towards sectors with higher productivity growth, it will support the Chinese government's credit quality by increasing its debt-carrying ability," Marie Diron, managing director of Moody's Sovereign Risk Group, said at a conference in Beijing. — Reuters

No-deal Brexit may cost businesses $27b a year

LONDON, June 05: Companies face an extra 20 billion pounds ($27 billion) a year in costs to comply with the customs arrangement if there is a no-deal Brexit, Britain's most senior tax official said on Tuesday. Jon Thompson, permanent secretary at Her Majesty's Revenue and Customs, told lawmakers that leaving the EU with no deal would cost business a similar amount to a customs arrangement known as "max fac" - or maximum facilitation - because companies would have to fill in customs declarations. "If we move to WTO (World Trade Organisation) rules, that would definitely require customs declarations so it would be similar in terms of costs," Thompson said when asked about the cost of a no-deal Brexit. — Reuters

Australia keeps

interest rates

unchanged

SYDNEY, June 05: Australia's central bank kept interest rates at a record low Tuesday for a 20th consecutive meeting as it waits for signs of wage and price inflation as well as a drop in unemployment. The widely expected decision was made ahead of growth data Wednesday, with economists tipping the economy to have expanded a solid 0.9 per cent in January-March, and at an annual rate of 2.8 per cent. This would keep it on track to meet the RBA's target of three percent this year, helping reduce spare capacity in the economy. — AFP