What to watch in Asia today
Philippine presidential election: The son and namesake of late dictator Ferdinand Marcos is the frontrunner, with his running mate Sara Duterte, daughter of incumbent president Rodrigo Duterte, likely to clinch the vice presidency, according to opinion surveys. A total of 18,100 legislative, regional, provincial and municipal seats are up for grabs.
China: April trade balance figures are expected to reflect the disruption caused by coronavirus lockdowns on factory output and supply chains.
Economic data: Indonesia is due to release gross domestic product figures for the first quarter and consumer price index data. Japan issues its April composite and services purchasing managers’ index, while its central bank is due to release the minutes of its March meeting, in which policymakers voted to stand pat on low interest rates.
Markets: Japan’s Topix and Australia’s S&P/ASX 200 opened 0.9 per cent and 0.8 per cent lower, respectively. Asian markets elsewhere likely to follow suit, with futures for South Korea’s tech-heavy Kospi index down 0.04 per cent. Hong Kong is closed for a holiday.
US hits Gazprombank executives with sanctions for first time
The US sought to tighten sanctions on Russia on Sunday by blacklisting a swath of financial executives and restricting the provision of professional services, even as the EU struggled to finalise its latest package of penalties.
The US targeted executives at Gazprombank for the first time, while also barring companies from providing Russia with corporate services such as accounting and consulting.
However, diplomats said Hungary continued to hold back progress in Brussels on the EU’s proposed sixth package of sanctions, which will include a phased-in oil embargo aimed at squeezing Moscow’s sources of cash.
With Russia preparing for Victory Day celebrations on Monday, the G7 and its allies are seeking to harden the economic pressure on president Vladimir Putin’s regime. Joe Biden, the US president, on Sunday met his G7 counterparts and Ukraine’s leader Volodymyr Zelensky as part of a co-ordinated show of support for the war-torn country.
A senior Biden administration official said the new US sanctions targeted 27 executives of Gazprombank, Russia’s third-largest lender and a subsidiary of state-owned energy company Gazprom. But the measures did not freeze the company’s assets or prohibit transactions with it since it is the main way Russia sells gas to Europe.
“We’re sanctioning some of their top business executives, they’re the people who sit at the top of the organisation, to create a chilling effect . . . we don’t want Gazprombank to be seen as a safe haven,” the senior Biden administration official said.
Read more on the sanctions here.
Morrisons and EG make last-ditch bids for McColl’s
Wm Morrison has mounted a last-ditch rescue bid for McColl’s, prompting petrol station operator EG Group to improve its offer to buy the struggling UK convenience store chain out of administration.
Just hours before a court was expected to formally appoint an administrator, supermarket operator Morrisons tabled an improved offer to win over McColl’s lenders, who had rejected its earlier proposal.
EG, whose owners also control grocery chain Asda, has in turn offered to take on the funding of McColl’s pension scheme. The move attempts to assuage fears it would use a controversial insolvency procedure to break promises made to 2,000 retirement plan members.
The offers on Sunday marked the final hours of a two-way battle over McColl’s, with people close to the process expecting Morrisons and EG to submit best and final bids before a decision is taken on Monday.
McColl’s operates more than 1,200 convenience stores, including more than 200 outlets operating under the Morrisons Daily brand. Any sale might protect some of the 16,000 jobs that would be at risk if the company were to collapse. The convenience store group has debts of about £145mn.
Ministers are watching developments closely, with senior Conservative party figures saying the priority would be protecting jobs and livelihoods. But one government official said the choice between “overleveraged EG and US private equity” was not an especially appealing one.
Morrisons is owned by US buyout group Clayton, Dubilier & Rice.
Read more on the offer here.
Scholz vows to continue sending heavy weapons to Ukraine
Chancellor Olaf Scholz said Germany would continue to send heavy weapons to Ukraine, saying it was its historical responsibility to help the government in Kyiv defend itself against Russian aggression.
He made the comments during a speech to mark the 77th anniversary of the Allied victory in the second world war.
“We have learned a central lesson from the disastrous history of our country between 1933 and 1945,” he said in the televised address. “No more war. No more genocide. No more tyranny.”
“In the present situation that can mean only one thing: we defend justice and freedom — at the side of the victim. We support Ukraine in its fight against the aggressor.” Not doing so, he added, would be like “capitulating to brute force”.
Scholz’s speech reflected the shift in his thinking on arming Ukraine. He had initially ruled out providing Kyiv with heavy weapons such as tanks and armoured vehicles, saying this could make Germany a party to the war and trigger a nuclear conflict with Russia.
But in recent days he changed his tune. On Friday, the government announced it would be providing Ukraine with seven self-propelled howitzers, a type of artillery piece known as the PzH 2000. That followed a decision to give Kyiv around 50 Gepard (“Cheetah”) anti-aircraft guns.
Read more on Scholz’s comments here.