International News 12/06
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The ECB Benchmark Rate has decreased, however, the reduction in lending rates has not yet occurred.
The recent decision by the European Central Bank (ECB) to cut its benchmark interest rate may not necessarily result in lower lending rates, according to Robert Holzmann, ECB official and Governor of the National Bank of Austria. Holzmann stated that it is too early to determine whether the ECB's rate cut will lead to lower borrowing costs. The ECB reduced the bank deposit rate to 3.75% from 4.0% last week. However, Mr. Holzmann believes that the ECB will refrain from further easing due to disappointing wage and inflation data in recent weeks. He also noted that it may not be the optimal time for the ECB to raise interest rates, particularly in light of the discrepancy in interest rates between the ECB and the US Federal Reserve. Meanwhile, the Federal Reserve has indicated that it may cut interest rates this year, which could impact the euro exchange rate and potentially increase inflation in the Eurozone.
https://internasional.kontan.co.id/news/bunga-acuan-ecb-turun-bunga-pinjaman-belum-akan-turun
Aramco is seeking to raise US$11.2 billion in fresh funds.
Saudi Aramco has successfully conducted a secondary share offering, raising approximately $11.2 billion. In contrast to the 2019 initial public offering, this offering prioritises foreign investors, with approximately 60% of the total share sales allocated to them. International institutional investors now hold approximately 0.73% of the company's shares. The offering received a high level of interest from investors in the US, Europe, the UK, Hong Kong, and Japan, with fund managers generating orders of over $65 billion. A total of 450 fund managers participated in the offering, with over 125 of them being international investors. To stimulate demand, Aramco executives conducted visits to London and the US. Despite the secondary offering, the Kingdom of Saudi Arabia will retain majority ownership of approximately 82%, while the Public Investment Fund will hold a 16% stake.
https://internasional.kontan.co.id/news/aramco-incar-dana-segar-us-112-miliar-1
The Federal Reserve is anticipated to reduce interest rates on two occasions this year, commencing in September.
A majority of economists in a Reuters survey predict that the US Federal Reserve (Fed) will cut interest rates in September and again before the end of 2024. However, there is a risk that these cuts may only happen once or not at all. The market had previously predicted only one rate cut in November, but economists have consistently forecasted two cuts in recent months. The change in prediction is partly due to slower-than-expected US economic growth in the last quarter, although inflation remains high. Fed officials have expressed no urgency to lower interest rates, and some economists argue that the upcoming 'dot plot' projection will show two or fewer rate cuts this year. The majority of economists in the Reuters survey expect the first rate cut to occur in September, with only a few predicting a rate cut in July. No rate reduction is expected at the June policy meeting.