Inflation close to 14-year high
A key gauge of core inflation held near a 14-year high last month, further bolstering bets that the central bank will tighten policy at its meeting next month. The core inflation measure, which excludes private transport and accommodation, rose 5.1% from a year earlier, a joint statement from the Monetary Authority and the Ministry of Finance said yesterday. Commerce and Industry. It was the highest since November 2008 and compares to a Bloomberg survey median of 5% before the report. Headline inflation rose to 7.5% from 7% in July. That compares to a median of 7.2% in the Bloomberg survey. Monetary Authority officials expect inflation to peak before the end of the year, although they say price growth is expected to remain high next year.
Central bank raises rates
The central bank, in a rare tightening move, raised two of its key rates by 1 percentage point each to curb inflation and stabilize a currency that fell to a record high this week. The refinancing rate rose to 5% while the discount rate rose to 3.5% as of yesterday, the central bank said in a statement on Thursday. The overnight interbank lending rate and the dong deposit rate ceiling were also adjusted upward, he added. “The central bank is raising policy rates in a bid to continue fighting inflation, keeping the dong stable while supporting economic recovery,” the regulator said in a separate statement on its website. The dong fell for a ninth straight day to 23,712 to the US dollar on Thursday, the lowest since at least 1993. The central bank yesterday set the benchmark rate for the dong at 23,324 to the US dollar, the lowest since at least 2005.
Economic activity falls
Economic activity fell again this month, a closely watched survey showed yesterday, bolstering expectations of an impending recession. “The eurozone economic slowdown deepened in September, with business activity contracting for the third consecutive month,” said the S&P Global Flash Eurozone PMI. “Although modest, the rate of decline has accelerated at a pace that, barring pandemic closures, was the fastest since 2013.” The Purchasing Managers’ Index fell from 48.9 last month to 48.2 this month, with 50 or less representing an economic contraction. “A eurozone recession is on the cards as companies report deteriorating business conditions and mounting price pressures from soaring energy costs,” said Chris Williamson, chief economist at S&P Global Market Intelligence. “Germany is facing the most difficult conditions, with the economy deteriorating at a pace not seen outside of the pandemic since the global financial crisis,” he said.
CALB eyes HK$13.6 billion IPO
China Lithium Battery Technology Co (CALB, 中創新航), an electric vehicle battery supplier, is seeking to raise up to HK$13.6 billion ($1.7 billion) in its Hong Kong IPO Kong. The Jiangsu-based company is to begin taking orders from investors for about 265.8 million shares and is trading them at HK$38 to HK$51 each, according to the prospectus. Tianqi Lithium Corp (天齊鋰業), electric carmaker XPeng Inc (小鵬) and smartphone company Vivo Mobile Communications Co (維沃) are among the top 15 investors who have agreed to buy about 735.5 million HK dollars in shares. The offering is part of a group of potential announcements that could revive Hong Kong’s IPO market, after a shortage of big debuts in the first half of the year.
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