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Tuesday, Jul 14, 2020

Standard Chartered CEO says the global economy is inching back to ‘normal’

Standard Chartered CEO says the global economy is inching back to ‘normal’

“The good news is the state of the world is returning to something a little bit closer to normal,” said Bill Winters, chief executive of British bank Standard Chartered.
He pointed out that the U.S. and China have returned to “proper dialogue,” while disruption from pro-democracy protests in Hong Kong looked to be subsiding. But Winters said he’s “very concerned” that tensions in the Middle East could escalate.

There have been signs that some risks in the global economy are receding, allowing businesses to once again plan for the long term, said Bill Winters, chief executive of British bank Standard Chartered.

Winters pointed out on Monday that the U.S. and China have returned to “proper dialogue” to iron out their trade conflict, while disruption from pro-democracy protests in Hong Kong looked to be subsiding with early signs of tourists returning to the city.

The CEO said business at Stanchart, a London-headquartered bank focused on emerging markets, has been affected by the lack of confidence among firms to invest for the long term. He predicted that it’ll take awhile for all of that to recover.

But, “the good news is the state of the world is returning to something a little bit closer to normal,” he told CNBC’s “Street Signs Asia.”

The U.S.-China trade war dominated investors’ attention for much of the past two years and caused companies to hold back capital expenditure at a time when the global economy was already slowing down. That resulted in the International Monetary Fund slashing its global growth forecast multiple times since the trade war started.

Hong Kong, where Stanchart derives a major portion of its profits, saw its economy struggle under the pressure of the U.S.-China trade fight and anti-government protests which primarily hit the retail and hospitality sectors.

While the outlook for the U.S.-China trade relations and Hong Kong economy are on the mend, Winters said he’s “very concerned” that tensions in the Middle East could escalate after Iran last week fired missiles at Iraqi bases housing U.S. troops.

“Anything that came from an increase in violence in that region would directly impact the economy, would impact the prospects of the commercial markets,” he said.

“We’re assured by the fact that the U.S. and Iran seem to be in a phase of deescalation after the dramatic events of last week, but we’re fully aware that the underlying issue hasn’t been resolved,” Winters added.

The bank has a presence in Dubai and is setting up a full branch in Saudi Arabia, noted Winters. Still, Stanchart wouldn’t pull out of the markets at the first sign of trouble, he said.
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