Yinson Annual Report 2020

36 Yinson Holdings Berhad SECTION 2 EXTERNAL ENVIRONMENT G L O B A L E C ONOM Y Overview Risks Opportunities • Global growth could slow to its lowest reading since the Great Depression as the Covid-19 pandemic weighs on. This is exacerbated by cities and countries being ‘locked down’, restricting the flow of goods, services and people. • The trade war between China and US, rise in trade barriers and dislocation of supply chains could worsen macroeconomic stress and geopolitical tensions. • Global recession risk is heightened, given a protracted outbreak of Covid-19. Aggregated demand is expected to fall sharply. • Through these challenging times, Yinson’s operations and projects continue to be on track. Yinson has successfully completed a USD800 million refinancing exercise for FPSO JAK, adding liquidity to buffer the Group. • Governments and Central Banks could conduct coordinated fiscal and monetary stimulus to prop up the global economy. • The Federal Reserve (“the Fed”) has cut interest rates twice to near-zero in March 2020 to help shore up the US economy amid the Covid-19 pandemic. • The Fed has acted decisively to prevent the financial system from seizing up. It has entered into new territory and pledged to buy corporate bonds to help stabilise the market. EXTERNAL ENVIRONMENT E X T E R N A L VA R I A B L E S Global economy Oil and gas market Alternative energy sources Technology FPSO market Regulations The external environment that Yinson operates in are key contributing factors to our business’ viability. Yinson is well positioned to act on the opportunities presented by these external variables. Yinson uses our materiality matrix to better target our efforts and management of sustainability topics. Further information on how we mitigate these risks and consider these opportunities are found within our six Capitals, listed after our commentary on each external variable. How Yinson mitigates this risk: Financial Capital (pg 50), MD&A (pg 128)