SOURCE: THE STAR ONLINE
WASHINGTON: Now that the worst of the economic crisis is past and recovery is slowly under way, Congress must halt the mounting increase in U.S. debt to avoid damage to long-term growth and destruction of the dollar, Warren Buffett is urging.
The plainspoken billionaire weighed in with his view in an Op-Ed piece published in The New York Times Wednesday, saying that once recovery is solidified, lawmakers need to exercise "extraordinary political will" and slow the printing of money to finance the spike in debt.
That huge spending for financial bailout and economic stimulus was sorely needed to rescue the economy in its greatest peril since the 1930s, Buffett said, but now "unchecked emissions" of dollars "will certainly cause the purchasing power of currency to melt" the way runaway carbon emissions will likely melt icebergs.
With government spending now nearly double what it is taking in, "truly major changes in both taxes and outlays will be required," Buffett wrote.
"A revived economy can't come close to bridging that sort of gap."
Buffett, one of the world's wealthiest men, enjoys opining on issues of the day.
And as the "Oracle of Omaha" and head of a successful investment firm, his views carry weight in the public arena.
He has gained a sharper political profile in recent years and has spoken out, for example, on the obligation of the privileged to help the poor.
Buffett was a top economic adviser to Republican Arnold Schwarzenegger's first campaign for California governor and advised Democrat John Kerry's presidential campaign in 2004.
Last September at the height of the financial turmoil, Buffett's firm, Berkshire Hathway Inc., rushed in with a $5 billion in investment in Wall Street powerhouse Goldman Sachs Group Inc., a move viewed as a vote of confidence for a survivor of a crisis that felled two of its investment banking peers.
The economy "is now out of the emergency room and appears to be on a slow path to recovery," Buffett wrote in the Op-Ed.
"But enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects. For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself."
Because of the deficit, the amount of U.S. debt that is publicly held likely will rise to around 56 percent of Gross Domestic Product this fiscal year ending Oct. 1, from 41 percent last year, Buffett noted.
The three ways of financing the rising debt - borrowing from other countries, borrowing from Americans or printing money - all carry problems, he said.
"The United States is spewing a potentially damaging substance into our economy - greenback emissions," Buffett wrote. - AP
Thursday, August 20, 2009
Malaysian SMEs See Business Recovery In 2010
SOURCE: BERNAMA.COM
KUALA LUMPUR, Aug 19 (Bernama) -- Small and medium enterprises (SMEs) in Malaysia are optimistic that the current sluggish global economy will recover by this year or in 2010, according to the UPS Asia Business Monitor (UPS ABM) 2009.
In a statement on Wednesday, UPS said Malaysian SMEs, along with those surveyed in India, Taiwan, China and Singapore were the most optimistic toward recovery next year.
"Business prospects for 2009 have taken a sharp downturn. SME leaders in Malaysia are looking to offer more value added products and services, diversify their business and explore new revenue streams," said UPS Malaysia marketing manager Tee Wee Ping.
Tee said, of the 100 companies surveyed across Malaysia, 69 percent expected economic growth for the Asia Pacific to decline this year compared to only eight percent in 2008.
Furthermore, only 21 percent of SMEs in Malaysia predicted better business growth prospects for their companies this year, compared to 73 percent in 2008, he explained.
The ABM 2009 also revealed that despite the impact of the slowdown on their business, SMEs in Malaysia are still showing pockets of confidence by remaining stable with 40 percent of them expecting business prospects to remain the same.
"Most felt that tightening cash management via strict credit control and collection plans, exploring new revenue lines and reducing other cost such as rent, utilities and miscellaneous items is the way to sustain business and counter the effects of a global economic recession," he said.
Tee added SME leaders are not looking to downsize their staff count despite the current economic conditions as retaining talent and providing adequate training and support to employees is a key factor to growing a qualified workforce and staying competitive.
About 61 percent of Malaysian SMEs also intend to retain their current workforce with another 24 percent planning new recruitment.
He said the lack of a qualified workforce has been rated as one the biggest threats to the competitiveness and future growth of SMEs in Malaysia.
Overall in Asia, SMEs in the region saw major obstacles to competitiveness in the form of lack of government support, access to funding and working capital, innovation and the availability of a qualified workforce.
KUALA LUMPUR, Aug 19 (Bernama) -- Small and medium enterprises (SMEs) in Malaysia are optimistic that the current sluggish global economy will recover by this year or in 2010, according to the UPS Asia Business Monitor (UPS ABM) 2009.
In a statement on Wednesday, UPS said Malaysian SMEs, along with those surveyed in India, Taiwan, China and Singapore were the most optimistic toward recovery next year.
"Business prospects for 2009 have taken a sharp downturn. SME leaders in Malaysia are looking to offer more value added products and services, diversify their business and explore new revenue streams," said UPS Malaysia marketing manager Tee Wee Ping.
Tee said, of the 100 companies surveyed across Malaysia, 69 percent expected economic growth for the Asia Pacific to decline this year compared to only eight percent in 2008.
Furthermore, only 21 percent of SMEs in Malaysia predicted better business growth prospects for their companies this year, compared to 73 percent in 2008, he explained.
The ABM 2009 also revealed that despite the impact of the slowdown on their business, SMEs in Malaysia are still showing pockets of confidence by remaining stable with 40 percent of them expecting business prospects to remain the same.
"Most felt that tightening cash management via strict credit control and collection plans, exploring new revenue lines and reducing other cost such as rent, utilities and miscellaneous items is the way to sustain business and counter the effects of a global economic recession," he said.
Tee added SME leaders are not looking to downsize their staff count despite the current economic conditions as retaining talent and providing adequate training and support to employees is a key factor to growing a qualified workforce and staying competitive.
About 61 percent of Malaysian SMEs also intend to retain their current workforce with another 24 percent planning new recruitment.
He said the lack of a qualified workforce has been rated as one the biggest threats to the competitiveness and future growth of SMEs in Malaysia.
Overall in Asia, SMEs in the region saw major obstacles to competitiveness in the form of lack of government support, access to funding and working capital, innovation and the availability of a qualified workforce.
Wednesday, August 19, 2009
Second China company debuts on Malaysian bourse
Source: THE STAR ONLINE
KUALA LUMPUR: China-based shoe sole maker Multi Sports Holdings Ltd. began trading Wednesday on Malaysia's stock exchange, becoming the second foreign company to list here.
It was a shot in the arm for the Malaysian bourse, which recently simplified and sped up procedures to attract more foreign listings and give its market more depth amid the global credit crunch.
Multi Sports hit a high of 0.89 ringgit (25 cents) shortly after debuting on the main board of Bursa Malaysia, up from its initial public offering price of 0.85 ringgit (24 cents).
However, it slid to 0.815 ringgit (23 cents) at noon in an overall sluggish market.
Chris Eng, analyst with OSK Securities, said investors are expected to be cautious with the two foreign stocks as the companies are fairly small and in the competitive area of shoe manufacturing.
Stock of China's sportswear company Xingquan International Sports Holdings Ltd, which began trading July 10, was at 1.43 ringgit (40.4 cents) at noon Wednesday, down 16 percent from its IPO price of 1.71 ringgit (48 cents).
"The appetite for good quality foreign IPO is huge but people tend to be cautious of generally small foreign companies," Eng said.
Authorities waived listing fees and gave fast-tracked approvals to Xingquan and Multi Sports under its efforts to get more foreign participation.
Multi Sports Chief Executive Lin Hou Zhi said the company chose to be listed in Malaysia because it was less affected by the global financial crisis compared to other nations.
The company has said it expected to raise 58 million ringgit ($16 million) from its share sale and would use part of the proceeds to build a second factory in China to triple its production capacity to 74.6 million pairs of soles a year.
Based in the southeastern city of Jinjiang in the Fujian province, Multi Sports posted a net profit of 46.8 million ringgit ($13 million) last year. - AP
KUALA LUMPUR: China-based shoe sole maker Multi Sports Holdings Ltd. began trading Wednesday on Malaysia's stock exchange, becoming the second foreign company to list here.
It was a shot in the arm for the Malaysian bourse, which recently simplified and sped up procedures to attract more foreign listings and give its market more depth amid the global credit crunch.
Multi Sports hit a high of 0.89 ringgit (25 cents) shortly after debuting on the main board of Bursa Malaysia, up from its initial public offering price of 0.85 ringgit (24 cents).
However, it slid to 0.815 ringgit (23 cents) at noon in an overall sluggish market.
Chris Eng, analyst with OSK Securities, said investors are expected to be cautious with the two foreign stocks as the companies are fairly small and in the competitive area of shoe manufacturing.
Stock of China's sportswear company Xingquan International Sports Holdings Ltd, which began trading July 10, was at 1.43 ringgit (40.4 cents) at noon Wednesday, down 16 percent from its IPO price of 1.71 ringgit (48 cents).
"The appetite for good quality foreign IPO is huge but people tend to be cautious of generally small foreign companies," Eng said.
Authorities waived listing fees and gave fast-tracked approvals to Xingquan and Multi Sports under its efforts to get more foreign participation.
Multi Sports Chief Executive Lin Hou Zhi said the company chose to be listed in Malaysia because it was less affected by the global financial crisis compared to other nations.
The company has said it expected to raise 58 million ringgit ($16 million) from its share sale and would use part of the proceeds to build a second factory in China to triple its production capacity to 74.6 million pairs of soles a year.
Based in the southeastern city of Jinjiang in the Fujian province, Multi Sports posted a net profit of 46.8 million ringgit ($13 million) last year. - AP
Tuesday, August 18, 2009
Talk on Buffett’s investment principles
Source: THE STAR ONLINE
KUALA LUMPUR: Warren Buffett may have reported some huge losses in the investments he made through Berkshire Hathaway Inc over the last couple of months, but the recent quarterly results only show that a longer-term view is necessary to evaluate his investment returns, says Robert P. Miles.
“As in most of the mistakes he made in the past, Buffett would probably say ‘a little more time please’,” Miles, an author, professional speaker and Warren Buffett expert, told StarBiz in an email.
Buffett, whose investment strategies and techniques are still regarded by most as the best and most successful ever, was not spared from the recent global financial crisis.
Weighed down by losses from investments and derivative bets, his investment arm Berkshire Hathaway posted a net loss of US$1.53bil (RM5.43bil) – its worst loss in at least two decades – for the quarter to March 31, compared with a profit of US$940mil in the same period a year ago.
But the company returned to the black with a second-quarter profit of US$3.29bil on improved stock markets and credit derivative gains.
“The global financial crisis presented Buffett some unbelievable opportunities to invest in preferred stocks such as Goldman Sachs, General Electric Company and Swiss Re,” Miles said, adding that railroads and banks were some of Buffett’s favourite plays currently.
For instance, Buffett in May increased his stakes in Wells Fargo & Co and US Bancorp by about 4.3% and 2.2%, respectively, when both counters were trading at their lowest prices in more than a decade.
“Buffett understands banks,” Miles said, “and he obviously believes in the long-term health of the banks, and he thinks their managers are rational, candid and doing the right thing for their shareholders.”
According to Miles, Buffett is an excellent example of corporate governance and should be studied around the world.
“He has greatly influenced many corporations – particularly those in which he holds stakes – such as in the way they expense their stock options, change their accounting procedures and make transparent their executive perks in their annual reports,” Miles said, adding that Buffett had resigned from some boards that had not followed his advice.
Miles will be in Kuala Lumpur to conduct a one-day seminar on Buffett’s principles of investment on Thursday at Istana Hotel.
Organised by the Malaysian Alliance of Corporate Directors, the seminar will feature Miles speaking on Warren Buffett Corporate Governance: Building a World Class Board of Directors and Astute Investing in Turbulent Times: Why Warren Buffett Prefers Declining Markets.
KUALA LUMPUR: Warren Buffett may have reported some huge losses in the investments he made through Berkshire Hathaway Inc over the last couple of months, but the recent quarterly results only show that a longer-term view is necessary to evaluate his investment returns, says Robert P. Miles.
“As in most of the mistakes he made in the past, Buffett would probably say ‘a little more time please’,” Miles, an author, professional speaker and Warren Buffett expert, told StarBiz in an email.
Buffett, whose investment strategies and techniques are still regarded by most as the best and most successful ever, was not spared from the recent global financial crisis.
Weighed down by losses from investments and derivative bets, his investment arm Berkshire Hathaway posted a net loss of US$1.53bil (RM5.43bil) – its worst loss in at least two decades – for the quarter to March 31, compared with a profit of US$940mil in the same period a year ago.
But the company returned to the black with a second-quarter profit of US$3.29bil on improved stock markets and credit derivative gains.
“The global financial crisis presented Buffett some unbelievable opportunities to invest in preferred stocks such as Goldman Sachs, General Electric Company and Swiss Re,” Miles said, adding that railroads and banks were some of Buffett’s favourite plays currently.
For instance, Buffett in May increased his stakes in Wells Fargo & Co and US Bancorp by about 4.3% and 2.2%, respectively, when both counters were trading at their lowest prices in more than a decade.
“Buffett understands banks,” Miles said, “and he obviously believes in the long-term health of the banks, and he thinks their managers are rational, candid and doing the right thing for their shareholders.”
According to Miles, Buffett is an excellent example of corporate governance and should be studied around the world.
“He has greatly influenced many corporations – particularly those in which he holds stakes – such as in the way they expense their stock options, change their accounting procedures and make transparent their executive perks in their annual reports,” Miles said, adding that Buffett had resigned from some boards that had not followed his advice.
Miles will be in Kuala Lumpur to conduct a one-day seminar on Buffett’s principles of investment on Thursday at Istana Hotel.
Organised by the Malaysian Alliance of Corporate Directors, the seminar will feature Miles speaking on Warren Buffett Corporate Governance: Building a World Class Board of Directors and Astute Investing in Turbulent Times: Why Warren Buffett Prefers Declining Markets.
FBM KLCI down; investor cautious of region’s recovery
Source: The Star Online
PETALING JAYA: The FTSE Bursa Malaysia KLCI (FBM KLCI) stayed in the red, along with its regional peers, as investors turned wary of the region’s recovery story led by China.
A Bloomberg report said Japan’s economic growth was below some economists’ expectations while foreign direct investment in China fell for the 10th month in July.
Last week, reports showed Chinese exports slowed in July, lending fell and investment growth weakened while Australia’s wage growth stalled due to high unemployment.
At 12.30pm, the Shanghai benchmark index fell almost 1.1%, Nikkei 225 was down 0.5%, Hang Seng Index lost 0.3%, Taiex dropped 2.3%, Kospi fell 0.09% while Singapore’s Straits Times Index was slightly up by 0.04%.
The FBM KLCI was 9.3 points lower at 1,159.7 before the midday break.
Losers led gainers 397 to 131 while 208 counters were unchanged.
Prices of crude palm oil (CPO) futures recovered marginally after yesterday’s losses.
CPO for November delivery rose RM36 per tonne to RM2,371. Oil in electronic trading in Singapore was higher at US$66.87 per barrel.
Plantation stocks, however, saw some selling pressure.
Sime Darby Bhd lost 8 sen to RM8.22, Kuala Lumpur Kepong Bhd dropped 46 sen to RM13.38, PPB Group Bhd fell 16 sen to RM14.92 and IOI Corp Bhd shed 14 sen to RM5.06.
On the gainers list, Adventa Bhd rose 8 sen to RM1.83 and Top Glove Corp Bhd added 9 sen to RM7.15.
OSK Investment Bank, in a report, said across east Asia, markets had rallied to the levels last seen in late 2006 and early 2007, indicating that markets were significantly overvalued and ripe for a retracement.
Corporate results wise, there were more outperformance this season, leading to upward revision in earnings estimates, the research house said.
“While poorer results tend to be held back up to the end, we still believe this results season will see more upgrades than downgrades,” OSK added.
PETALING JAYA: The FTSE Bursa Malaysia KLCI (FBM KLCI) stayed in the red, along with its regional peers, as investors turned wary of the region’s recovery story led by China.
A Bloomberg report said Japan’s economic growth was below some economists’ expectations while foreign direct investment in China fell for the 10th month in July.
Last week, reports showed Chinese exports slowed in July, lending fell and investment growth weakened while Australia’s wage growth stalled due to high unemployment.
At 12.30pm, the Shanghai benchmark index fell almost 1.1%, Nikkei 225 was down 0.5%, Hang Seng Index lost 0.3%, Taiex dropped 2.3%, Kospi fell 0.09% while Singapore’s Straits Times Index was slightly up by 0.04%.
The FBM KLCI was 9.3 points lower at 1,159.7 before the midday break.
Losers led gainers 397 to 131 while 208 counters were unchanged.
Prices of crude palm oil (CPO) futures recovered marginally after yesterday’s losses.
CPO for November delivery rose RM36 per tonne to RM2,371. Oil in electronic trading in Singapore was higher at US$66.87 per barrel.
Plantation stocks, however, saw some selling pressure.
Sime Darby Bhd lost 8 sen to RM8.22, Kuala Lumpur Kepong Bhd dropped 46 sen to RM13.38, PPB Group Bhd fell 16 sen to RM14.92 and IOI Corp Bhd shed 14 sen to RM5.06.
On the gainers list, Adventa Bhd rose 8 sen to RM1.83 and Top Glove Corp Bhd added 9 sen to RM7.15.
OSK Investment Bank, in a report, said across east Asia, markets had rallied to the levels last seen in late 2006 and early 2007, indicating that markets were significantly overvalued and ripe for a retracement.
Corporate results wise, there were more outperformance this season, leading to upward revision in earnings estimates, the research house said.
“While poorer results tend to be held back up to the end, we still believe this results season will see more upgrades than downgrades,” OSK added.
Ideal Property to launch RM1.1bil project in Penang
Souce: David Tan (The Star Online.COM)
GEORGE TOWN: The RM1.1bil Penang International City, located on a 100-acre site in Bayan Lepas, will be the most expensive and largest project unveiled on the island this year when it is launched in October, said Ideal Property Development Sdn Bhd managing director Datuk Alex Ooi.
Ideal Property is developing the project through a joint venture with Koperasi Tunas Muda.
It comprises some 1,800 landed residential and high-rise properties, which make up 80% of the project, with commercial properties taking up the rest, according to Ooi.
“Our strategy is to first launch the residential components, strengthen the infrastructure, and then move on to the commercial phase, comprising a four-star hotel, a 250,000 sq ft lifestyle shopping mall, and a 150,000 sq ft resort office building, equipped with recreational facilities, besides modern IT infrastructure,” he said.
The landed residential components, over 500 terraced and semi-detached units, will be launched in three phases between October 2009 and April 2010.”
Subsequently residential high-rise properties, comprising over 1,000 condominium units will be launched while “sometime in late 2010 or early 2011, the commercial components will be launched,” he added.
Subsequently residential high-rise properties, comprising over 1,000 condominium units will be launched while “sometime in late 2010 or early 2011, the commercial components will be launched,” he added.
Ooi said the landed properties would be priced between RM550,000 and RM780,000, while the apartments between RM300,000 and RM500,000, adding that a 12-acre site would be allocated for the development of an education institution.
“We will also create a one-acre man-made lake as part of the project,” he said.
The project would be marketed in Hong Kong, Singapore, Indonesia, and other parts of Asia, Ooi said.
“We are confident as the property market in China has rebounded, which will have a positive impact on the regional market,” he said.
The recent brisk sales of the One World and One Sky high-rise projects in Bayan Baru showed very strong demand for residential properties on the island, Ooi said.
“The One World and One Sky high-rise properties by Ideal Property and Kuwait Finance House were respectively sold out after their launches in May and July.
“Both projects have over 500 condominium units, priced between RM235,000 and RM410,000,” he said.
Ooi said Ideal Property was also exploring to launch other projects with Koperasi Tunas Mudas, which owns other strategically located sites in the southwest district of the island.
“We are considering the development of modern office buildings next year,” he said.
Ideal Property is part of the Penang-based Ideal Group, comprising over 20 companies, involved in property development, property investment holding and business process outsourcing.
In property development, the group has since 2002 developed over 600 units of landed and residential high-rise properties in Penang and Kuala Lumpur.
The group currently owns and manages three properties on the island, including the landmark Northern Tower at Jalan Sultan Ahmad Shah (or the millionaires’ row) and a light industrial park in Kepong.
Besides Penang, the group also has property investment businesses in Cambodia, Shanghai and Beijing in China.
Monday, August 17, 2009
Bursa Shares End Broadly Lower
Source: Bernama.Com
KUALA LUMPUR, Aug 17 (Bernama) -- Share prices on Bursa Malaysia ended lower Monday on continuous selling activities across the board, dealers said.The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) declined 19.52 points to close at 1,169.05, after opening 1.32 points lower at 1,187.25.An analyst said the market was in a correction mode after recent gains with the FBM KLCI reaching the 1,190-point level last week."The downtrend was due to heavy profit taking and there was no fresh catalyst to boost it."The market needs it but I don't think there will be any fresh catalyst in the near-term," said SJ Securities analyst Phua Kwee Hock.He said the decline was also in line with the softer regional markets after the announcement of poor US consumer confidence data recently."The data failed to lift up the market, erasing hopes among investors on the world economic recession," he added.
At the close, the Finance Index went down 194.88 points to 9,455.31, the Plantation Index dipped 127.58 points to 5,939.38 and the Industrial Index decreased 33.22 points to 2,575.83.The FBM Emas Index slipped 162.18 points to 7,899.08, the FBM Top 100 eased 141.40 points to 7,671.14 and the FBM ACE Index declined 89.83 points to 4,216.64.Losers led gainers by 701 to 93 while 111 counters were unchanged and 331 others untraded.Total turnover decreased to 1.023 billion shares worth RM1.435 billion from 1.051 billion shares valued at RM1.556 billion last Friday.Volume leader KNM Group went down 4.5 sen to 75 sen while TA dropped seven sen to RM1.16, MRCB dipped eight sen to RM1.33, Axiata lost 13 sen to RM3.00 and Telekom Malaysia rose a sen to RM3.08.UEM Land slipped seven sen to RM1.56 sen and AirAsia inched down half a sen to RM1.44.Among heavyweights, Sime Darby declined 12 sen to RM8.30, Maybank was 13 sen lower at RM6.47, Bumiputra-Commerce lost 24 sen to RM10.50, Tenaga Nasional dipped three sen to RM8.10 and IOI Corporation was lower by 15 sen at RM5.20.Volume on the Main Market stood at 904.397 million shares worth RM1.414 billion, lower from last Friday's 931,588 million shares worth RM1.536 billion.Tthe ACE Market volume dipped to 72.808 million shares valued at RM11.237 million from 80.976 million shares valued at RM10.643 million.
Warrants, however, rose to 41.008 million units worth RM8.121 million from 34.939 million units worth RM7.967 million.Consumer products accounted for 40.815 million shares traded on the Main Market, industrial products 255.488 million, construction 76.080 million, trade/services 305.317 million, technology 18.790 million, infrastructure 12.012 million, finance 70.503 million, hotels 2.053 million, properties 90.185 million, plantations 32.075 million, mining 53,000, REITs 952,900 and closed/fund 75,300.
KUALA LUMPUR, Aug 17 (Bernama) -- Share prices on Bursa Malaysia ended lower Monday on continuous selling activities across the board, dealers said.The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) declined 19.52 points to close at 1,169.05, after opening 1.32 points lower at 1,187.25.An analyst said the market was in a correction mode after recent gains with the FBM KLCI reaching the 1,190-point level last week."The downtrend was due to heavy profit taking and there was no fresh catalyst to boost it."The market needs it but I don't think there will be any fresh catalyst in the near-term," said SJ Securities analyst Phua Kwee Hock.He said the decline was also in line with the softer regional markets after the announcement of poor US consumer confidence data recently."The data failed to lift up the market, erasing hopes among investors on the world economic recession," he added.
At the close, the Finance Index went down 194.88 points to 9,455.31, the Plantation Index dipped 127.58 points to 5,939.38 and the Industrial Index decreased 33.22 points to 2,575.83.The FBM Emas Index slipped 162.18 points to 7,899.08, the FBM Top 100 eased 141.40 points to 7,671.14 and the FBM ACE Index declined 89.83 points to 4,216.64.Losers led gainers by 701 to 93 while 111 counters were unchanged and 331 others untraded.Total turnover decreased to 1.023 billion shares worth RM1.435 billion from 1.051 billion shares valued at RM1.556 billion last Friday.Volume leader KNM Group went down 4.5 sen to 75 sen while TA dropped seven sen to RM1.16, MRCB dipped eight sen to RM1.33, Axiata lost 13 sen to RM3.00 and Telekom Malaysia rose a sen to RM3.08.UEM Land slipped seven sen to RM1.56 sen and AirAsia inched down half a sen to RM1.44.Among heavyweights, Sime Darby declined 12 sen to RM8.30, Maybank was 13 sen lower at RM6.47, Bumiputra-Commerce lost 24 sen to RM10.50, Tenaga Nasional dipped three sen to RM8.10 and IOI Corporation was lower by 15 sen at RM5.20.Volume on the Main Market stood at 904.397 million shares worth RM1.414 billion, lower from last Friday's 931,588 million shares worth RM1.536 billion.Tthe ACE Market volume dipped to 72.808 million shares valued at RM11.237 million from 80.976 million shares valued at RM10.643 million.
Warrants, however, rose to 41.008 million units worth RM8.121 million from 34.939 million units worth RM7.967 million.Consumer products accounted for 40.815 million shares traded on the Main Market, industrial products 255.488 million, construction 76.080 million, trade/services 305.317 million, technology 18.790 million, infrastructure 12.012 million, finance 70.503 million, hotels 2.053 million, properties 90.185 million, plantations 32.075 million, mining 53,000, REITs 952,900 and closed/fund 75,300.
IMF Commends Malaysia For Sound Macroeconomic Management
Ramjit (Bernama.Com)
KUALA LUMPUR, Aug 15 (Bernama) -- The International Monetary Fund (IMF) has commended Malaysian authorities for sound macroeconomic management in difficult circumstances, and observed that Malaysia is well positioned to weather the severe impact of the global downturn.A strong external position, robust balance sheets of household and corporate sectors, and sound financial system should lessen the blow from adverse external shocks, it said in a public information notice issued after its executive board concluded the 2009 Article IV Consultation with Malaysia.
The consultation concluded on July 16.Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year.A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies.It prepares a report, which forms the basis for discussion by the executive board, and at the conclusion of the discussion, the managing director, as chairman of the board, summarises the views of executive directors, and this summary is transmitted to the country's authorities.IMF executive board's directors agreed that the counter-cyclical fiscal response has been appropriately large, and should mitigate the impact of output contraction on households and businesses.They saw some limited room for additional stimulus if the downturn proves longer or deeper than expected.
At the same time, noting the high prospective budget deficits and a rising debt to gross domestic product (GDP) ratio, they strongly encouraged the authorities to cast any future fiscal decisions in a medium-term framework.The directors highlighted that the necessary steps to reduce medium-term fiscal risks included broadening the non-oil tax base, moving ahead with subsidy reform, and putting fiscal policy on a credible consolidation path.They considered monetary policy settings to be broadly appropriate, and suggested that monetary policy should continue to provide the first line of defence against any deterioration of growth prospects, especially in light of the limited fiscal space.
Nevertheless, they felt that unless the outlook for growth or inflation deteriorates significantly, monetary policy should stay the course until a recovery is firmly underway.They also emphasised that although the financial sector appears sound and benefited from the growth of Islamic finance, volatile global markets put a premium on crisis preparedness and proactive supervision.They welcomed the authorities' focus on further preventive steps, including upgrading the stress-testing framework, ensuring effective risk management, and strengthening supervisory cooperation and oversight of institutions with cross-border activities.They underscored that a key medium-term challenge will be strengthening domestic demand as a source of growth.They encouraged the authorities to continue to focus on promoting private investment and deepening reforms in labour and product markets.They welcomed the recent decision to push ahead with further liberalisation in selected sectors, but stressed that more remains to be done to enhance the business climate and remove long-standing structural impediments to investment.Most directors generally considered that Malaysia's current exchange rate policy to be broadly appropriate.
They also noted the staff's assessment that the ringgit appears to be weaker than its equilibrium level in real effective terms.However, many directors were unconvinced by the exchange rate assessment, and underlined the uncertainty about fundamentals and transitory factors related to Malaysia's commodity exports and the global crisis.They concurred with the authorities' view that the exchange rate policy is consistent with a return to a gradual trend appreciation of the currency once the crisis subsides.Some directors supported the staff's position that, once the recovery is firmly established, a faster pace of real appreciation would facilitate a rebalancing of sources of growth toward domestic demand.As a background, IMF said Malaysia has been hit hard by the global downturn.The economy is set to contract for the first time in 10 years, while GDP growth and inflation have slowed sharply since mid-2008, it said.However, the reduction in employment has been relatively small so far, and as a result, consumer confidence has generally held up, it added.IMF said Malaysia's financial sector has faced the crisis from a position of strength and so far has coped well.Nevertheless, global turbulence has spilled into the domestic financial markets, it said.Equity prices fell sharply in late 2008 and early 2009, but rebounded more recently, reflecting renewed optimism about near-term prospects and an upturn in commodity prices, IMF said.Credit growth has decelerated, but remained at a reasonable 10.5 percent year-on-year in April 2009, well above nominal GDP growth, it said.
"Despite capital reversals and the unwinding of the commodity boom, Malaysia's external position remains strong," it added.The current account surplus reached 17 percent of GDP in 2008, as the collapse of exports in late 2008 was accompanied by an equally strong import compression, IMF said.The ringgit has appreciated slightly vis-a-vis the US dollar since April, fter experiencing depreciation pressures last fall and early this year as capital outflows intensified, it said.Budget consolidation was reversed in 2008.The central government deficit rose to almost five percent of GDP and is set to reach nearly eight percent of GDP in 2009, it said.Two stimulus packages have been announced in late 2008 and early 2009, totalling about 10 percent of GDP, to be implemented over two years.The packages include an array of expenditure and revenue measures, as well as loan guarantees, it added.Monetary policy has been loosened decisively, according to IMF.
Bank Negara Malaysia has slashed its policy rate by 150 basis points to two percent, and reserve requirements have also been cut to reduce the cost of financial inter mediation, it said.On the whole, dollar liquidity has remained adequate, and the monetary transmission mechanism has not been undermined by the global market turbulence.IMF said external developments will probably shape Malaysia's recovery path.The export-led recession is expected to last through end-2009, with quarterly growth returning in early 2010, it said.Risks to growth relate to the duration of the global recession, the evolution of commodity prices, and adverse macro-financial interactions, it added.
KUALA LUMPUR, Aug 15 (Bernama) -- The International Monetary Fund (IMF) has commended Malaysian authorities for sound macroeconomic management in difficult circumstances, and observed that Malaysia is well positioned to weather the severe impact of the global downturn.A strong external position, robust balance sheets of household and corporate sectors, and sound financial system should lessen the blow from adverse external shocks, it said in a public information notice issued after its executive board concluded the 2009 Article IV Consultation with Malaysia.
The consultation concluded on July 16.Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year.A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies.It prepares a report, which forms the basis for discussion by the executive board, and at the conclusion of the discussion, the managing director, as chairman of the board, summarises the views of executive directors, and this summary is transmitted to the country's authorities.IMF executive board's directors agreed that the counter-cyclical fiscal response has been appropriately large, and should mitigate the impact of output contraction on households and businesses.They saw some limited room for additional stimulus if the downturn proves longer or deeper than expected.
At the same time, noting the high prospective budget deficits and a rising debt to gross domestic product (GDP) ratio, they strongly encouraged the authorities to cast any future fiscal decisions in a medium-term framework.The directors highlighted that the necessary steps to reduce medium-term fiscal risks included broadening the non-oil tax base, moving ahead with subsidy reform, and putting fiscal policy on a credible consolidation path.They considered monetary policy settings to be broadly appropriate, and suggested that monetary policy should continue to provide the first line of defence against any deterioration of growth prospects, especially in light of the limited fiscal space.
Nevertheless, they felt that unless the outlook for growth or inflation deteriorates significantly, monetary policy should stay the course until a recovery is firmly underway.They also emphasised that although the financial sector appears sound and benefited from the growth of Islamic finance, volatile global markets put a premium on crisis preparedness and proactive supervision.They welcomed the authorities' focus on further preventive steps, including upgrading the stress-testing framework, ensuring effective risk management, and strengthening supervisory cooperation and oversight of institutions with cross-border activities.They underscored that a key medium-term challenge will be strengthening domestic demand as a source of growth.They encouraged the authorities to continue to focus on promoting private investment and deepening reforms in labour and product markets.They welcomed the recent decision to push ahead with further liberalisation in selected sectors, but stressed that more remains to be done to enhance the business climate and remove long-standing structural impediments to investment.Most directors generally considered that Malaysia's current exchange rate policy to be broadly appropriate.
They also noted the staff's assessment that the ringgit appears to be weaker than its equilibrium level in real effective terms.However, many directors were unconvinced by the exchange rate assessment, and underlined the uncertainty about fundamentals and transitory factors related to Malaysia's commodity exports and the global crisis.They concurred with the authorities' view that the exchange rate policy is consistent with a return to a gradual trend appreciation of the currency once the crisis subsides.Some directors supported the staff's position that, once the recovery is firmly established, a faster pace of real appreciation would facilitate a rebalancing of sources of growth toward domestic demand.As a background, IMF said Malaysia has been hit hard by the global downturn.The economy is set to contract for the first time in 10 years, while GDP growth and inflation have slowed sharply since mid-2008, it said.However, the reduction in employment has been relatively small so far, and as a result, consumer confidence has generally held up, it added.IMF said Malaysia's financial sector has faced the crisis from a position of strength and so far has coped well.Nevertheless, global turbulence has spilled into the domestic financial markets, it said.Equity prices fell sharply in late 2008 and early 2009, but rebounded more recently, reflecting renewed optimism about near-term prospects and an upturn in commodity prices, IMF said.Credit growth has decelerated, but remained at a reasonable 10.5 percent year-on-year in April 2009, well above nominal GDP growth, it said.
"Despite capital reversals and the unwinding of the commodity boom, Malaysia's external position remains strong," it added.The current account surplus reached 17 percent of GDP in 2008, as the collapse of exports in late 2008 was accompanied by an equally strong import compression, IMF said.The ringgit has appreciated slightly vis-a-vis the US dollar since April, fter experiencing depreciation pressures last fall and early this year as capital outflows intensified, it said.Budget consolidation was reversed in 2008.The central government deficit rose to almost five percent of GDP and is set to reach nearly eight percent of GDP in 2009, it said.Two stimulus packages have been announced in late 2008 and early 2009, totalling about 10 percent of GDP, to be implemented over two years.The packages include an array of expenditure and revenue measures, as well as loan guarantees, it added.Monetary policy has been loosened decisively, according to IMF.
Bank Negara Malaysia has slashed its policy rate by 150 basis points to two percent, and reserve requirements have also been cut to reduce the cost of financial inter mediation, it said.On the whole, dollar liquidity has remained adequate, and the monetary transmission mechanism has not been undermined by the global market turbulence.IMF said external developments will probably shape Malaysia's recovery path.The export-led recession is expected to last through end-2009, with quarterly growth returning in early 2010, it said.Risks to growth relate to the duration of the global recession, the evolution of commodity prices, and adverse macro-financial interactions, it added.
Thursday, August 13, 2009
Worldwide rally lifts local stocks higher
Source: The Star Online
KUALA LUMPUR: Shares on Bursa Malaysia advanced on Thursday, although the benchmark index rise was checked by investors' lacked of appetite for pricey local blue chip stocks.
At the close, the FBM KLCI Index rose 5.65 points, or 0.5% at 1,186.19 points. The broader FBM Emas Index jumped 0.7% to 8,052 points, while the FBM SmallCap Index sizzled 2% to 10,355 points.
Total turnover was 1.1 billion shares worth RM1.68bil. Market breadth was positive, with 568 rising counters leading 166 decliners and 194 counters traded unchanged.
Shares in Mudajaya surged 67 sen, or 24% to close at a record RM3.45 after CIMB raised the stock’s target price ro RM6.65 from RM3.68 previously. The stock was the biggest gainer among the 319-counters strong FBM Emas Index.
Another stock that benefited from upgrades by analysts today was IJM Land. The counter jumped 19 sen, or 10% to RM1.98 after AmResearch’s lifted its fair value call on the stock from RM2.40 to RM3.
Investors were in a buoyant mood yesterday, pushing major indices in Hong Kong, Taiwan, Australia and Indonesia up by at least 2%. Thailand’s leading stock indicator rose 1.8%, while shares were 1.7% higher in Singapore.
Shares in India were up by at least 3% ahead of the closing bell.
In Europe, shares rose by about 1% after latest government data showed that the German and French economies expanded in the second quarter, which confirmed the two countries exit from their worst recessions since World War II.
Euro zone economies contracted 0.1% during the quarter, which was better than what most economisthad expected.
Crude oil climbed above US$71 per barrel.
KUALA LUMPUR: Shares on Bursa Malaysia advanced on Thursday, although the benchmark index rise was checked by investors' lacked of appetite for pricey local blue chip stocks.
At the close, the FBM KLCI Index rose 5.65 points, or 0.5% at 1,186.19 points. The broader FBM Emas Index jumped 0.7% to 8,052 points, while the FBM SmallCap Index sizzled 2% to 10,355 points.
Total turnover was 1.1 billion shares worth RM1.68bil. Market breadth was positive, with 568 rising counters leading 166 decliners and 194 counters traded unchanged.
Shares in Mudajaya surged 67 sen, or 24% to close at a record RM3.45 after CIMB raised the stock’s target price ro RM6.65 from RM3.68 previously. The stock was the biggest gainer among the 319-counters strong FBM Emas Index.
Another stock that benefited from upgrades by analysts today was IJM Land. The counter jumped 19 sen, or 10% to RM1.98 after AmResearch’s lifted its fair value call on the stock from RM2.40 to RM3.
Investors were in a buoyant mood yesterday, pushing major indices in Hong Kong, Taiwan, Australia and Indonesia up by at least 2%. Thailand’s leading stock indicator rose 1.8%, while shares were 1.7% higher in Singapore.
Shares in India were up by at least 3% ahead of the closing bell.
In Europe, shares rose by about 1% after latest government data showed that the German and French economies expanded in the second quarter, which confirmed the two countries exit from their worst recessions since World War II.
Euro zone economies contracted 0.1% during the quarter, which was better than what most economisthad expected.
Crude oil climbed above US$71 per barrel.
Monday, August 10, 2009
KLCI Closes Higher
Source: THE STAR ONLINE
KUALA LUMPUR: Local stocks closed higher on Monday, with rubber glove makers posting handsome double digit gains as investors bet that companies like Supermax Corp, Adventa and Rubberex Corp would profit from increased demand and higher prices.
The FBM KLCI closed 3.12 points higher, or 0.28% at 1,188 points - a new high for the year. Total market turnover was 870 million shares worth an estimated RM1.286bil.
Rising stocks outnumbered decliners by a comfortable margin of 416 versus 262, while 218 counters were unchanged. The broader FBM Emas index rose 0.38% to 8,051 points and the FBM Small Cap index jumped 1.3% to 10,201 points.
Commodity related stocks hogged the limelight.
Shares in Supermax jumped 30 sen, or 11% to RM3.03, while Adventa rose 38 sen, or 22% to RM2.11 and Rubberex added 27 sen, or 16% to RM2.00.
Big plantations stocks, however, failed to ride on the bullish industry data that propelled crude palm oil futures contracts on Bursa Derivatives by as much as 3.4% to new two-month highs.
Sime Darby added 2 sen to RM8.28, IOI Corp advanced 1 sen to RM5.14 and KL-Kepong climbed 6 sen to RM12.70.
The Malaysian Palm Oil Board said on Monday that the edible oil stockpile in the country dropped 5.7% in July to 1.3 million tonnes from the previous month, as export surged faster than production.
Most Asian bourses ended higher on Monday, but European equities were down in early trade after four weeks of straight gains.
KUALA LUMPUR: Local stocks closed higher on Monday, with rubber glove makers posting handsome double digit gains as investors bet that companies like Supermax Corp, Adventa and Rubberex Corp would profit from increased demand and higher prices.
The FBM KLCI closed 3.12 points higher, or 0.28% at 1,188 points - a new high for the year. Total market turnover was 870 million shares worth an estimated RM1.286bil.
Rising stocks outnumbered decliners by a comfortable margin of 416 versus 262, while 218 counters were unchanged. The broader FBM Emas index rose 0.38% to 8,051 points and the FBM Small Cap index jumped 1.3% to 10,201 points.
Commodity related stocks hogged the limelight.
Shares in Supermax jumped 30 sen, or 11% to RM3.03, while Adventa rose 38 sen, or 22% to RM2.11 and Rubberex added 27 sen, or 16% to RM2.00.
Big plantations stocks, however, failed to ride on the bullish industry data that propelled crude palm oil futures contracts on Bursa Derivatives by as much as 3.4% to new two-month highs.
Sime Darby added 2 sen to RM8.28, IOI Corp advanced 1 sen to RM5.14 and KL-Kepong climbed 6 sen to RM12.70.
The Malaysian Palm Oil Board said on Monday that the edible oil stockpile in the country dropped 5.7% in July to 1.3 million tonnes from the previous month, as export surged faster than production.
Most Asian bourses ended higher on Monday, but European equities were down in early trade after four weeks of straight gains.
Sunday, August 9, 2009
Bursa Shares Likely To Be Lower Next Week
Source: Bernama.Com
KUALA LUMPUR, Aug 8 (Bernama) -- Share prices on Bursa Malaysia are expected to be lower next week as investors could go on profit taking after the rally the past few weeks, said an analyst.
"Local investors may re-enter once new market catalysts emerge," he said.
The analyst said one of the factors that could affect investors' decision next week would be the outcome of the US July employment report.
The report, to be released on Friday, would be the firmer evidence that the world's biggest economy has turned the corner.
On technical outlook, the analyst said, "a close above solid technical resistance of 1,200 is what would be needed by the bulls to reach an explosive target."
For the week just ended, the market saw the introduction of FTSE Bursa Malaysia ACE Index on Monday following changes to the MESDAQ Market as an alternative market for emerging companies of all sizes and sectors. It is now called the ACE Market.
The Main Board and Second Board were also merged into a unified board for established companies and is now known as the Main Market.
During the week, the local market sentiment was strong over optimism that the global economic slowdown led by the US has come to an end.
US President Barack Obama said that the US may be seeing the "very beginnings" of the end of the recession as the country was losing jobs at half the rate it was at the beginning of this year.
This sent the FBM Kuala Lumpur Composite Index (FBM KLCI) 9.98 points up to end the week at 1,184.88, although the market was slightly jittery ahead of the US employment report.
The Finance Index rose 133.80 to close the week at 9,689.03, the Plantation Index increased 141.88 points to 5,751.48 and the Industrial Index was 34.87 points higher at 2,610.85.
The FBM Emas Index added 101.20 points to 8,020.99, the FBM Top 100 Index rose 83.70 points to 7,789.75 and the newly introduced FBM ACE Index ended the week at 4,244.55.
Total turnover for the week fell to 4.801 billion shares worth RM7.702 billion from 5.457 billion shares worth RM8.236 billion a week before.
Volume on the Main Market stood at 4.197 billion units worth RM7.572 billion while the ACE Market volume was at 410.409 million units worth RM75.145 million.
The volume of call warrants declined to 167.581 million units worth RM42.159 million from 195.933 million units worth RM40.220 million the previous week.
KUALA LUMPUR, Aug 8 (Bernama) -- Share prices on Bursa Malaysia are expected to be lower next week as investors could go on profit taking after the rally the past few weeks, said an analyst.
"Local investors may re-enter once new market catalysts emerge," he said.
The analyst said one of the factors that could affect investors' decision next week would be the outcome of the US July employment report.
The report, to be released on Friday, would be the firmer evidence that the world's biggest economy has turned the corner.
On technical outlook, the analyst said, "a close above solid technical resistance of 1,200 is what would be needed by the bulls to reach an explosive target."
For the week just ended, the market saw the introduction of FTSE Bursa Malaysia ACE Index on Monday following changes to the MESDAQ Market as an alternative market for emerging companies of all sizes and sectors. It is now called the ACE Market.
The Main Board and Second Board were also merged into a unified board for established companies and is now known as the Main Market.
During the week, the local market sentiment was strong over optimism that the global economic slowdown led by the US has come to an end.
US President Barack Obama said that the US may be seeing the "very beginnings" of the end of the recession as the country was losing jobs at half the rate it was at the beginning of this year.
This sent the FBM Kuala Lumpur Composite Index (FBM KLCI) 9.98 points up to end the week at 1,184.88, although the market was slightly jittery ahead of the US employment report.
The Finance Index rose 133.80 to close the week at 9,689.03, the Plantation Index increased 141.88 points to 5,751.48 and the Industrial Index was 34.87 points higher at 2,610.85.
The FBM Emas Index added 101.20 points to 8,020.99, the FBM Top 100 Index rose 83.70 points to 7,789.75 and the newly introduced FBM ACE Index ended the week at 4,244.55.
Total turnover for the week fell to 4.801 billion shares worth RM7.702 billion from 5.457 billion shares worth RM8.236 billion a week before.
Volume on the Main Market stood at 4.197 billion units worth RM7.572 billion while the ACE Market volume was at 410.409 million units worth RM75.145 million.
The volume of call warrants declined to 167.581 million units worth RM42.159 million from 195.933 million units worth RM40.220 million the previous week.
Saturday, August 8, 2009
Asia Currencies: Ringgit, Peso Lead Weekly Gains as Slump Eases
Source: Lilian Karunungan (Bloomberg)
Aug. 8 (Bloomberg) -- Asian currencies rose this week, led by the Malaysian ringgit and the Philippine peso, as signs a global economic recovery is gathering pace bolstered demand for emerging-market assets.
The ringgit reached a two-month high against the dollar and the peso had its best week since May after reports showed manufacturing picked up last month in the U.S., Europe and China. Indonesia’s rupiah climbed to its strongest level in nine months before paring gains amid concern the central bank will combat appreciation to support exporters.
“Risk assets such as Asian currencies could rally further,” said Craig Chan, a Singapore-base strategist at Nomura Holdings Inc., Japan’s largest brokerage. “The momentum that has been built up in the market has been strong. There’s been very good numbers” from economic data.
The ringgit climbed 0.3 percent this week to 3.5065 per dollar in Kuala Lumpur, according to data compiled by Bloomberg. It reached 3.4840 on Aug. 5, the highest since June 3. The peso advanced 0.7 percent to 47.755 and the rupiah was little changed at 9,965. The Indonesian currency reached 9,850 on Aug. 4, its strongest level since October.
The U.S. Institute for Supply Management’s factory gauge and a Markit Economics index of euro-area manufacturing activity both rose to 11-month highs in July, based on separate surveys of purchasing managers in the two economies. The indicators stayed below 50, signaling contractions. Surveys published this month in China, the world’s third-largest economy, showed factory output there expanded for at least a fourth month.
Maxis IPO
Malaysia’s government said on Aug. 6 there are “some signs of recovery” in electronics, the nation’s biggest export, after reporting that a slump in overseas shipments slowed in June.
The ringgit rose for a fourth week, the longest winning streak since early April. The Kuala Lumpur Composite Index of shares rallied to the highest level since June 2008 as mobile- phone operator Maxis Communications Bhd. prepares for what may be a record stock offering for Malaysia.
“The main driving factor for the ringgit is the stock inflows” given the improving economic outlook, said Azmi Shukri Rahman, a currency trader at CIMB Investment Bank Bhd. in Kuala Lumpur. “The new IPO should attract overseas funds in the medium term.”
Malaysian exports fell 22.6 percent from a year earlier, following a 30 percent drop in May, the trade ministry said on Aug. 5. Electronics manufacturers have seen “a slight pickup in orders so there’s a good sign,” Trade Minister Mustapa Mohamed told reporters in Singapore this week.
Global Recovery
The peso strengthened after JPMorgan Chase & Co. forecast remittances from overseas workers, which account for 10 percent of the economy, will increase 2 percent this year, revising a prior prediction for a 12 percent drop.
“The overall picture is a stronger peso because of the optimism on the global recovery,” said Alan Cayetano, a senior trader at Metropolitan Bank & Trust Co. in Manila. “There’s been a steady stream of positive data and good corporate earnings in the U.S. that has fueled momentum for investors to take on risk trades.”
Overseas investors bought more Indonesian stocks than they sold on all but one of the last 16 days, lured by the fastest economic expansion in Southeast Asia. Bank Indonesia said yesterday it wants “stability” in the rupiah, noting that asset appreciation this year has been spurred by inflows of $4 billion from abroad.
Intervention Risk
“Foreigners like Indonesia’s positive economic growth,” said Esther Chandra, a currency dealer at PT Bank Pan Indonesia in Jakarta. “But Bank Indonesia is also watching very closely and checking markets very frequently as they don’t want the rupiah to appreciate too fast.”
Concern about central bank intervention was also cited by traders as a factor limiting gains this week in the Korean won, the Taiwan dollar and the Thai baht.
The won rose 0.3 percent this week to 1,224.90 versus the greenback, the Taiwan dollar gained 0.1 percent to NT$32.792 and the Thai baht traded at 33.94 compared with 34.01 on July 31. The Singapore dollar rose 0.2 percent to S$1.4373.
Aug. 8 (Bloomberg) -- Asian currencies rose this week, led by the Malaysian ringgit and the Philippine peso, as signs a global economic recovery is gathering pace bolstered demand for emerging-market assets.
The ringgit reached a two-month high against the dollar and the peso had its best week since May after reports showed manufacturing picked up last month in the U.S., Europe and China. Indonesia’s rupiah climbed to its strongest level in nine months before paring gains amid concern the central bank will combat appreciation to support exporters.
“Risk assets such as Asian currencies could rally further,” said Craig Chan, a Singapore-base strategist at Nomura Holdings Inc., Japan’s largest brokerage. “The momentum that has been built up in the market has been strong. There’s been very good numbers” from economic data.
The ringgit climbed 0.3 percent this week to 3.5065 per dollar in Kuala Lumpur, according to data compiled by Bloomberg. It reached 3.4840 on Aug. 5, the highest since June 3. The peso advanced 0.7 percent to 47.755 and the rupiah was little changed at 9,965. The Indonesian currency reached 9,850 on Aug. 4, its strongest level since October.
The U.S. Institute for Supply Management’s factory gauge and a Markit Economics index of euro-area manufacturing activity both rose to 11-month highs in July, based on separate surveys of purchasing managers in the two economies. The indicators stayed below 50, signaling contractions. Surveys published this month in China, the world’s third-largest economy, showed factory output there expanded for at least a fourth month.
Maxis IPO
Malaysia’s government said on Aug. 6 there are “some signs of recovery” in electronics, the nation’s biggest export, after reporting that a slump in overseas shipments slowed in June.
The ringgit rose for a fourth week, the longest winning streak since early April. The Kuala Lumpur Composite Index of shares rallied to the highest level since June 2008 as mobile- phone operator Maxis Communications Bhd. prepares for what may be a record stock offering for Malaysia.
“The main driving factor for the ringgit is the stock inflows” given the improving economic outlook, said Azmi Shukri Rahman, a currency trader at CIMB Investment Bank Bhd. in Kuala Lumpur. “The new IPO should attract overseas funds in the medium term.”
Malaysian exports fell 22.6 percent from a year earlier, following a 30 percent drop in May, the trade ministry said on Aug. 5. Electronics manufacturers have seen “a slight pickup in orders so there’s a good sign,” Trade Minister Mustapa Mohamed told reporters in Singapore this week.
Global Recovery
The peso strengthened after JPMorgan Chase & Co. forecast remittances from overseas workers, which account for 10 percent of the economy, will increase 2 percent this year, revising a prior prediction for a 12 percent drop.
“The overall picture is a stronger peso because of the optimism on the global recovery,” said Alan Cayetano, a senior trader at Metropolitan Bank & Trust Co. in Manila. “There’s been a steady stream of positive data and good corporate earnings in the U.S. that has fueled momentum for investors to take on risk trades.”
Overseas investors bought more Indonesian stocks than they sold on all but one of the last 16 days, lured by the fastest economic expansion in Southeast Asia. Bank Indonesia said yesterday it wants “stability” in the rupiah, noting that asset appreciation this year has been spurred by inflows of $4 billion from abroad.
Intervention Risk
“Foreigners like Indonesia’s positive economic growth,” said Esther Chandra, a currency dealer at PT Bank Pan Indonesia in Jakarta. “But Bank Indonesia is also watching very closely and checking markets very frequently as they don’t want the rupiah to appreciate too fast.”
Concern about central bank intervention was also cited by traders as a factor limiting gains this week in the Korean won, the Taiwan dollar and the Thai baht.
The won rose 0.3 percent this week to 1,224.90 versus the greenback, the Taiwan dollar gained 0.1 percent to NT$32.792 and the Thai baht traded at 33.94 compared with 34.01 on July 31. The Singapore dollar rose 0.2 percent to S$1.4373.
Friday, August 7, 2009
Positive signs for US economy, jobless claims fall and fewer layoffs
Source: The Star Online
WASHINGTON: In a positive sign for the U.S. economy, companies are laying off fewer workers as they prepare to ramp up production to replenish their depleted stockpiles of goods.
Many analysts pointed to Thursday's drop in jobless claims as evidence of a trend signaling fewer job losses in coming months, particularly compared with the flood of layoffs earlier this year.
Still, job openings remain scarce.
And most economists expect the unemployment rate to keep rising to 10 percent or higher by the end of this year.
On Friday, the government will report the July unemployment rate.
First-time claims for jobless benefits dropped to a seasonally adjusted 550,000 last week, down from 588,000 in the previous week, the Labor Department said Thursday.
The four-week average of claims, which smooths out fluctuations, dropped to 555,250, its lowest point since late January.
"The lower claims figures are an important economic development and confirmation that the economy is turning the corner," Joseph LaVorgna, chief U.S. economist at Deutsche Bank, wrote in a note to clients.
Fewer layoffs could help boost consumer sentiment.
That's because those who are spending less now for fear of losing their jobs could grow more confident.
If they start borrowing and spending more, it would help invigorate the economy.
Many economists say an improved job market could be evident in the unemployment report to be issued Friday.
LaVorgna, for example, has cut his projection of job losses for July to 150,000 from 325,000.
That would be the fewest since last July.
Overall, analysts expect the report will show the unemployment rate rose to a 26-year high of 9.6 percent last month, up from 9.5 percent in June, according to survey by Thomson Reuters.
Employers are forecast to have cut 320,000 jobs in July, the survey found, down from 467,000 in June and from an average of 645,000 in the six months from November to April.
But many economists think the July job losses will be smaller.
Dean Maki, chief U.S. economist at Barclays Capital, expects Friday's report to show a 275,000 drop in payrolls.
Analysts generally expect production to ramp up in the July-September period as manufacturers restock shelves and warehouses.
Layoffs in the construction industry should also decline, Maki said, because home building has recovered from record lows.
Spending on residential construction rose in June for the first time in more than three years, the Commerce Department said Monday.
"We think the trend is toward smaller and smaller job cuts" until the last three months of the year, Maki said, when employers may actually add jobs - which hasn't happened since December 2007.
Many companies have cut as many workers as they possibly can while still maintaining an adequate output of goods, said Rob Saam, senior vice president of Lee Hecht Harrison, a consulting firm that helps find jobs for laid-off professionals.
In many cases, these companies have managed to boost the productivity of their diminished staff.
"You can only maintain that level of productivity for so long before you wear out your work force," Saam said.
Other figures out Thursday indicated that jobs are still scarce.
The number of people who are continuing to claim unemployment benefits rose by 69,000 to 6.3 million, after having dropped for three straight weeks - evidence that the unemployed are having difficulty finding new work.
The figures for continuing jobless claims lag behind those for initial claims by a week.
When emergency extensions of unemployment are included, the total jobless benefit rolls climbed to a record 9.35 million for the week ending July 18, the most recent period for which figures are available.
Congress has added up to 53 extra weeks of benefits on top of the 26 typically provided by the states.
Despite the decline in new jobless claims, they remain far above the 300,000 to 350,000 that analysts say is consistent with a healthy economy.
New claims last fell below 300,000 in early 2007.
Separately, many retail chains reported sluggish July sales Thursday as consumers proved reluctant to spend.
Mall-based chains, such as Macy's Inc. and teen retailers Abercrombie & Fitch, were the hardest hit as shoppers focused on necessities.
Financial markets fell in afternoon trading.
The Dow Jones industrial average dropped 24 points, or 0.27 percent, while broader stock averages also declined.
The recession, which began in December 2007 and is the longest since World War II, has eliminated a net total of 6.5 million jobs.
More job cuts were announced this week.
The publisher of the Milwaukee Journal Sentinel said it would slash 92 jobs as the current advertising slump continues to ravage the newspaper business.
Elsewhere, about 6,000 General Motors Co. blue-collar workers have taken the latest round of early retirement and buyout offers.
But GM wants to cut about 13,500 workers, setting the stage for more layoffs. - AP
WASHINGTON: In a positive sign for the U.S. economy, companies are laying off fewer workers as they prepare to ramp up production to replenish their depleted stockpiles of goods.
Many analysts pointed to Thursday's drop in jobless claims as evidence of a trend signaling fewer job losses in coming months, particularly compared with the flood of layoffs earlier this year.
Still, job openings remain scarce.
And most economists expect the unemployment rate to keep rising to 10 percent or higher by the end of this year.
On Friday, the government will report the July unemployment rate.
First-time claims for jobless benefits dropped to a seasonally adjusted 550,000 last week, down from 588,000 in the previous week, the Labor Department said Thursday.
The four-week average of claims, which smooths out fluctuations, dropped to 555,250, its lowest point since late January.
"The lower claims figures are an important economic development and confirmation that the economy is turning the corner," Joseph LaVorgna, chief U.S. economist at Deutsche Bank, wrote in a note to clients.
Fewer layoffs could help boost consumer sentiment.
That's because those who are spending less now for fear of losing their jobs could grow more confident.
If they start borrowing and spending more, it would help invigorate the economy.
Many economists say an improved job market could be evident in the unemployment report to be issued Friday.
LaVorgna, for example, has cut his projection of job losses for July to 150,000 from 325,000.
That would be the fewest since last July.
Overall, analysts expect the report will show the unemployment rate rose to a 26-year high of 9.6 percent last month, up from 9.5 percent in June, according to survey by Thomson Reuters.
Employers are forecast to have cut 320,000 jobs in July, the survey found, down from 467,000 in June and from an average of 645,000 in the six months from November to April.
But many economists think the July job losses will be smaller.
Dean Maki, chief U.S. economist at Barclays Capital, expects Friday's report to show a 275,000 drop in payrolls.
Analysts generally expect production to ramp up in the July-September period as manufacturers restock shelves and warehouses.
Layoffs in the construction industry should also decline, Maki said, because home building has recovered from record lows.
Spending on residential construction rose in June for the first time in more than three years, the Commerce Department said Monday.
"We think the trend is toward smaller and smaller job cuts" until the last three months of the year, Maki said, when employers may actually add jobs - which hasn't happened since December 2007.
Many companies have cut as many workers as they possibly can while still maintaining an adequate output of goods, said Rob Saam, senior vice president of Lee Hecht Harrison, a consulting firm that helps find jobs for laid-off professionals.
In many cases, these companies have managed to boost the productivity of their diminished staff.
"You can only maintain that level of productivity for so long before you wear out your work force," Saam said.
Other figures out Thursday indicated that jobs are still scarce.
The number of people who are continuing to claim unemployment benefits rose by 69,000 to 6.3 million, after having dropped for three straight weeks - evidence that the unemployed are having difficulty finding new work.
The figures for continuing jobless claims lag behind those for initial claims by a week.
When emergency extensions of unemployment are included, the total jobless benefit rolls climbed to a record 9.35 million for the week ending July 18, the most recent period for which figures are available.
Congress has added up to 53 extra weeks of benefits on top of the 26 typically provided by the states.
Despite the decline in new jobless claims, they remain far above the 300,000 to 350,000 that analysts say is consistent with a healthy economy.
New claims last fell below 300,000 in early 2007.
Separately, many retail chains reported sluggish July sales Thursday as consumers proved reluctant to spend.
Mall-based chains, such as Macy's Inc. and teen retailers Abercrombie & Fitch, were the hardest hit as shoppers focused on necessities.
Financial markets fell in afternoon trading.
The Dow Jones industrial average dropped 24 points, or 0.27 percent, while broader stock averages also declined.
The recession, which began in December 2007 and is the longest since World War II, has eliminated a net total of 6.5 million jobs.
More job cuts were announced this week.
The publisher of the Milwaukee Journal Sentinel said it would slash 92 jobs as the current advertising slump continues to ravage the newspaper business.
Elsewhere, about 6,000 General Motors Co. blue-collar workers have taken the latest round of early retirement and buyout offers.
But GM wants to cut about 13,500 workers, setting the stage for more layoffs. - AP
Economist: Malaysia's Investment environment must improve
Source: The Star Online
KUALA LUMPUR: Despite talk of a relatively robust recovery among emerging markets, not all is sunny on the local economic front.
International investors are questioning Malaysia’s regional economic competitiveness as they begin to evaluate potential post-crisis investment opportunities in the Asian region.
Deutsche Bank Group global chief economist Dr Norbert Walter said Malaysia should make a concerted effort to improve its investment environment if it wanted to remain a competitive economic force among other emerging markets in the long run.
He cited political instability, uncertainty in the constitutional application of syariah law, and the lack of more concrete plans to develop local infrastructure as some of the key structural and institutional problems that might mar the country’s ability to attract and retain capital.
“Investment in Malaysia has been falling by almost 11% year-on-year for the past two quarters. Malaysia’s political volatility seems to be harming businesses and deterring future investment opportunities,” he told a media briefing on the worldwide recession yesterday.
When asked on the weakness of the ringgit against the greenback relative to other commodity-based currencies such as the Australian dollar, Walter speculated that this too might be due to investment capital outflows.
While the former International Monetary Fund economist lauded the Government’s prudence in diversifying its investment in sectors other than oil and gas such as the manufacturing sector, he urged the hasty embrace of renewable energy sources.
“Malaysia should capitalise on its geographical advantage as a tropical nation and explore its potential as a solar and biomass energy hub,” he said. On Malaysia’s economic recovery from the current crisis, Walter forecast an acceleration of growth well into 2010.
According to him, Malaysia’s recovery, however, would be slower than that of Singapore due to its greater reliance on foreign demand for commodities. The latter had already seen a recovery in the past month.
He alluded regional cooperation between Asean nations as a source of future growth and stability. “Deeper integration between Asean countries is definitely needed for economic reasons and for representation in the international forum,” he said, adding that Malaysia should promote Putrajaya as the official headquarters for Asean, even calling it the “Brussels of Asia”.
He went on to praise Bank Negara for promoting research of a potential integrated Asian monetary regime.
Thursday, August 6, 2009
Malaysia and Brunei explore oil and gas project
Source: STEPHEN THEN (The Star Online)
BANDAR SERI BEGAWAN: Malaysia and Brunei have taken a step forward to explore the possibility of oil and gas joint ventures in the maritime territories they both share, although details have yet to be worked out.
This followed a “highly successful meeting” between Malaysian Prime Minister Datuk Seri Najib Tun Razak and the Sultan of Brunei, Sultan Hassanal Bolkiah, who is also the Prime Minister.
A very happy-looking Najib told a press conference Thursday that his private meeting with the Sultan in conjunction with the two countries’ 13th annual consultation had ended on a “very satisfactory” note.
“This annual meeting has achieved very satisfactory results. The Sultan said he looks forward to greater levels of cooperation between us.
“The agreement between our two countries to settle the land and maritime boundary demarcation is one of the big milestones ... that will bring our bilateral relationship to new heights,” he said.
The boundary issue has been agreed to in principle, he said. There was still a large section of land at the Sarawak-Brunei that needed to demarcated and a topographical survey had to be conducted.
“The agreement (on the land and maritime boundary demarcation) will be final. The possibility of joint exploration (for oil and gas) will be worked out later,” Najib said.
Malaysia has proposed a role for its national oil and gas company Petronas in the joint venture, although that role had yet to be worked out, he told reporters before concluding his three-day official visit to this oil-rich sultanate.
He declined to give details on Petronas’ proposed role.
In March, Malaysia and Brunei had agreed in principle to resolve outstanding overlapping claims on the land and maritime boundary covering Limbang, a division in Sarawak sandwiched by the two borders of Brunei, following a meeting between the then Prime Minister Tun Abdullah Ahmad Badawi and the Sultan.
BANDAR SERI BEGAWAN: Malaysia and Brunei have taken a step forward to explore the possibility of oil and gas joint ventures in the maritime territories they both share, although details have yet to be worked out.
This followed a “highly successful meeting” between Malaysian Prime Minister Datuk Seri Najib Tun Razak and the Sultan of Brunei, Sultan Hassanal Bolkiah, who is also the Prime Minister.
A very happy-looking Najib told a press conference Thursday that his private meeting with the Sultan in conjunction with the two countries’ 13th annual consultation had ended on a “very satisfactory” note.
“This annual meeting has achieved very satisfactory results. The Sultan said he looks forward to greater levels of cooperation between us.
“The agreement between our two countries to settle the land and maritime boundary demarcation is one of the big milestones ... that will bring our bilateral relationship to new heights,” he said.
The boundary issue has been agreed to in principle, he said. There was still a large section of land at the Sarawak-Brunei that needed to demarcated and a topographical survey had to be conducted.
“The agreement (on the land and maritime boundary demarcation) will be final. The possibility of joint exploration (for oil and gas) will be worked out later,” Najib said.
Malaysia has proposed a role for its national oil and gas company Petronas in the joint venture, although that role had yet to be worked out, he told reporters before concluding his three-day official visit to this oil-rich sultanate.
He declined to give details on Petronas’ proposed role.
In March, Malaysia and Brunei had agreed in principle to resolve outstanding overlapping claims on the land and maritime boundary covering Limbang, a division in Sarawak sandwiched by the two borders of Brunei, following a meeting between the then Prime Minister Tun Abdullah Ahmad Badawi and the Sultan.
Tuesday, August 4, 2009
Analysts: Signs of quick rebound in property sector
Source: EUGENE MAHALINGAM (The Star Online)
PETALING JAYA: The slew of property launches and speedy take-up rates lately are signs that the local (property) sector is on a quick rebound from the global economic downturn.
In its latest report, HwangDBS Vickers Research said the local high-end property sector had been on an uptrend, with developers raking in quick profits from project launches.
Among them were DNP Bhd’s Verticas condominiums in Bukit Ceylon, Kuala Lumpur, which saw 60% of the 50 units soft launched being taken up.
En bloc buyers also snapped up 93% of non-bumiputra units launched (last month) at IJM Land Bhd’s Light Linear project in Penang.
“We see demand for high-end units returning, which could re-rate the sector,” said HwangDBS.
It also highlighted Eastern & Oriental Bhd’s St Mary serviced apartments in Kuala Lumpur (launched in June, 80% take-up in five days) and SP Setia Bhd’s Sky Residences condominiums in KL (previewed in September 2008, with an average 70% take-up so far).
“Developers are more confident now to resume launches, which should lead to faster earnings recovery. Selling prices may soon be raised and incentives gradually pulled back, resulting in margin expansion for developers,” HwangDBS said.
An analyst from a local bank-backed brokerage said the take-up rates were not surprising, given the developers’ good reputation.
“These developers aren’t your fly-by-night type of developers. They have very good reputation and solid track record. The average investor or house-buyer is more likely to park his money with a well-known developer, knowing that his money would be safe,” he said.
Another analyst said the property sector was making a comeback in the region. In the last few months, Hong Kong, Singapore and China had seen strong surges in property demand, she said.
“There’s so much liquidity with nowhere to go. This is one of the safest ways to fight inflation. Putting your money in the bank basically means being eaten up alive by inflation.
“Malaysian property is generally still very affordable. If you don’t buy one now, it will be even more difficult to afford it next time. The 2% interest you get from banks is nothing,” she noted.
HwangDBS also highlighted the Malaysia Property Inc, a joint public-private sector initiative aimed to attract foreign investments worth RM20bil in the domestic real estate sector over the next 10 years.
“The recent liberalisation measures (abolishment of local equity ownership requirement for mergers and acquisitions and Foreign Investment Committee approvals) should help boost both foreign and local demand for Malaysian properties.
“Previous policy changes (waiver of real property gains tax and monthly EPF withdrawals) introduced just before the financial crisis have yet to be fully felt and could be strong catalysts during a recovery,” it said.
Global economy back on track next year
Source: VANMALA SUBRAMANIAM (The Star Online)
Expert: Rates and unemployment will, however, remain high for some time
KUALA LUMPUR: The global economy is expected to be back on track by early next year, said former World Bank economist and bond market expert Ismail Dalla.
“The world economy is in a recovery mode,” he said, adding that his outlook analysis was based primarily on the World Bank’s latest forecast for a positive growth of 2.8% in the world economy by the last quarter of 2010.
But he cautioned that “despite some signs of recovery due largely to the amount of money being pumped into the US economy, interest rates will remain low and unemployment will remain high for some time to come.”
Dalla was speaking at public lecture organized by University Putra Malaysia titled Malaysian Fixed-Income Markets in the Context of Global Bond Markets here yesterday.
Commenting on the development of the domestic bond market, Dalla, now a visiting professor at the School of Business, George Washington University in the US, noted that Malaysia had the largest corporate bond market as a percentage of gross domestic product (GDP) in the world last year, surpassing that of the US and South Korea.
He also applauded Malaysia’s efforts in developing a healthy and robust local currency bond market and the recent proposal to create a private pension fund as an alternative to the Employees Provision Fund (EPF).
“This new private pension scheme is good news. The current EPF scheme reduces disposable income, limiting an individual’s ability to invest in the bond market,” said the author of The Korean Bond Market – Post-Asian Crisis and Beyond.
The Government recently announced that Malaysia would set up a private pension fund by the middle of 2010, aimed at those who remain outside any formal pension system.
According to Dalla, prospects for emerging market debt remain excellent as the asset class had performed much better than high yielding US bonds amid the global financial crisis.
With the increased availability of risk management tools, local currency bond markets had the potential and room to grow in depth and sophistication, he said.
The challenge was for market regulators to be proactive and avoid excessive counter-productive innovation and risk-taking, Dalla said.
Malaysia May Make Early Recovery From Crisis
Source: Bernama.Com
KUALA LUMPUR, Aug 3 (Bernama) -- Malaysia is expected to be one of the first few countries in the region to recover from the economic crisis, said Ismail Dalla, a visiting professor at the School of Business, George Washington University, United States of America.
"Based on what's happening on the ground, it seems like we are already in the recovery mode," he said.
An international consultant on capital-market issues, Dalla said this when asked to comment on the country's economic outlook following a public lecture from him on "Malaysian fixed-income markets in the context of global bond markets".
Dalla, who has extensive experience in the financial markets including 25 years with the World Bank Group dealing with both the public and private sectors in the emerging markets, said recovery was on the way with indications of better gross domestic product growth.
His lecture programme here Monday was jointly organised by Graduate School of Management (GSM) University Putra Malaysia and RAM Holdings.
KUALA LUMPUR, Aug 3 (Bernama) -- Malaysia is expected to be one of the first few countries in the region to recover from the economic crisis, said Ismail Dalla, a visiting professor at the School of Business, George Washington University, United States of America.
"Based on what's happening on the ground, it seems like we are already in the recovery mode," he said.
An international consultant on capital-market issues, Dalla said this when asked to comment on the country's economic outlook following a public lecture from him on "Malaysian fixed-income markets in the context of global bond markets".
Dalla, who has extensive experience in the financial markets including 25 years with the World Bank Group dealing with both the public and private sectors in the emerging markets, said recovery was on the way with indications of better gross domestic product growth.
His lecture programme here Monday was jointly organised by Graduate School of Management (GSM) University Putra Malaysia and RAM Holdings.
Sunday, August 2, 2009
US recession appears on verge of ending, economy poised for growing again
Source: The Star Online
WASHINGTON: At long last, the worst recession in America since World War II appears on the verge of ending.
The economy dipped only slightly in the second quarter of this year - falling at a 1 percent annual pace, better than expected.
And many analysts think the economy is starting to grow again in the current quarter, setting up a long-awaited recovery.
Still, any rebound is likely to be restrained by consumers' reluctance to spend. Stressed by rising unemployment, smaller paychecks and shrunken nest eggs, Americans spent less in the second quarter.
Without the full strength of consumer spending, which supplies more than two-thirds of U.S. economic activity, businesses would need to deliver more of the firepower for sustained growth.
Economists say they are hopeful that consumers, aided by the "cash for clunkers" program to boost car sales, eventually will nudge up spending.
Over time, that would help stem a still-heavy wave of job losses and stimulate hiring.
"We won't have a recovery as long as we keep losing jobs," President Barack Obama acknowledged Friday.
He added: "Eventually, businesses will start growing again and will start hiring again, and that's when it will truly feel like a recovery to the American people."
The small drop in gross domestic product for the April-to-June period, reported Friday by the Commerce Department, followed a dizzying free fall in the first three months of this year.
The economy plunged at an annual rate of 6.4 percent in the first quarter, the worst in nearly three decades.
Including the April-to-June period, the economy has now contracted for a record four straight quarters, for the first time on record dating to 1947.
Over that period, companies and ordinary Americans have suffered a painful toll, with job losses still exceeding a net total of 400,000 each month.
Many economists had predicted a slightly worse 1.5 percent annualized contraction in second-quarter GDP, which is considered the best gauge of U.S. economic health.
GDP measures the value of all goods and services - everything from cars, clothes and computers to makeup, manicures and machinery - produced in the United States.
"The recession seems to be largely over with at this point," said economist Joel Naroff, president of Naroff Economic Advisors.
"We still have a long way to go to get back to full health."
Behind the better second-quarter performance were other signs of a fading recession: less drastic spending cuts by businesses, a resumption of federal and local government spending and an improved trade picture.
Businesses did end up cutting their stockpiles of goods at a record pace in the second quarter, but that carries a silver lining.
With their inventories at rock-bottom, businesses will likely need to ramp up production to meet customer demand.
That would stimulate the economy starting in the current quarter.
Some economists think growth in the July-to-September quarter could be more vigorous than previously forecast - possibly 3 percent annual growth or higher.
Obama's stimulus package of tax cuts and increased government spending provided some support to the economy in the second quarter.
But it will have more impact in the second half of this year as it extends its reach, economists said.
In the meantime, the damage caused by this recession runs deep.
The figures released Friday provide the most compelling evidence to date that the current recession has been the worst since the Great Depression.
It has taken a 3.9 percent bite out of economic activity so far, said Mark Zandi, chief economist at Moody's Economy.com.
Before this downturn, the most painful hit came in the 1957-58 recession, when GDP fell 3.8 percent, he said.
And in revisions to GDP figures that stretch back to the Great Depression, the Commerce Department now estimates the economy grew just 0.4 percent in 2008.
That's much weaker than the 1.1 percent growth the government had earlier estimated.
Even if the recession ends later this year, the job market will remain weak. Companies are expected to keep cutting payroll through the rest of this year.
The Fed says unemployment - now at a 26-year high of 9.5 percent _ will top 10 percent at the end of this year.
Businesses won't likely boost hiring until they're certain the recovery has staying power.
In the second quarter, businesses - including home builders - continued to cut spending, though not nearly as much as they had earlier.
That's one reason the economy didn't contract as much as feared.
Consumers retreated en masse.
They sliced spending at a rate of 1.2 percent in the second quarter, after having nudged up purchases at a 0.6 percent pace in the first quarter.
In large part, that's because wages and salaries have fallen for the past three quarters.
With people spending less, Americans' savings rate rose sharply - to 5.2 percent in the second quarter, the highest since 1998.
As important as savings is, many economists wish that consumers would save less and spend more right now to help propel the recovery.
"I'm praying, 'God, please don't encourage American households to save a lot more just yet,"' said Nariman Behravesh, chief economist at IHS Global Insight. - AP
Friday, July 31, 2009
US stocks extend big July rally
Source: The Star Online
NEW YORK: Stocks added to an already impressive run Thursday as another round of earnings reports gave investors new reasons to be optimistic about the U.S. economy.
The Dow Jones industrial average rose its highest level in nearly nine months with a gain of 84 points and the Nasdaq composite index traded above 2,000 for the first time since October.
The latest reports struck on a theme that has played out for weeks: Times are tough but companies aren't doing as badly as had been feared. Many have chopped costs to produce profits well beyond the market's modest expectations.
Motorola Inc. said it used deep cost cuts to wring a profit from its latest quarter.
Analysts had expected a loss.
Goodyear Tire & Rubber's shortfall was half what had been expected and Dow Chemical Co.'s CEO said he believes the U.S. economy "has found bottom."
A surprise drop in the number of people continuing to seek unemployment benefits gave investors even more reason to put money into stocks.
With one day to go, the Dow is up 8.4 percent this month, its strongest July since 1989, when it gained 9 percent.
A much-anticipated report on the overall output of the economy is sure to drive the market's direction on Friday.
Stocks are up 13 percent since July 13 when investors bet correctly that Goldman Sachs Group Inc. would report enormous earnings.
Since then, other profit reports have brought hope that the longest recession since World War II might end this year.
AT&T Inc., chip maker Intel Corp. and heavy equipment maker Caterpillar Inc. all posted results that outran expectations.
Three out of four companies in the S&P 500 index that reported second-quarter results so far have topped analysts' expectations, according to Thomson Reuters. About 300 of the 500 companies have reported.
Analysts said the end of the month is pressuring money managers and traders to show they have kept up with July's steep rally. Often, the summer months are quieter than the rest of the year on Wall Street as traders take vacations.
Some of the buying is likely tied to short-covering, where investors have to buy stock after having earlier sold borrowed shares in a bet they would fall.
"People kind of got caught a little flat-footed here. The summer is supposed to be slow," said Jon Merriman, chief executive of Merriman Curhan Ford in San Francisco.
The Dow rose 83.74, or 0.9 percent, to 9,154.46 after being up as much as 176 points.
The Standard & Poor's 500 index rose 11.60, or 1.2 percent, to 986.75.
It rose to nearly 997 during the day.
It hasn't traded above 1,000 since November.
It was the highest close for the Dow and the S&P 500 index since Nov. 4.
The Nasdaq advanced 16.54, or 0.9 percent, to 1,984.30. It rose to nearly 2,010 in morning trading, its first move above 2,000 since Oct. 3.
The index is up 56 percent from its low of 1,269 in March.
It was the highest finish for the index since Oct. 1.
The Russell 2000 index of smaller companies rose 9.42, or 1.7 percent, to 557.80.
About for stocks rose for every one that fell on the New York Stock Exchange.
Volume came to 1.4 billion shares compared with 1.3 billion Wednesday.
Stocks made little progress in the four days prior to Thursday but some break in the buying had been expected after the steep gains.
Investors rewarded the latest companies to beat expectations. Motorola rose 62 cents, or 9.4 percent, to $7.19.
Goodyear rose $1.97, or 14.2 percent, to $15.86. Dow Chemical rose $1.26, or 6.2 percent, to $21.53.
General Electric Co. led the Dow Jones industrial average higher after a Goldman Sachs analyst raised his rating on the stock and predicted the industrial conglomerate won't have to split off its lending arm under financial industry reform proposals circulating in Congress.
The stock rose 85 cents, or 6.9 percent, to $13.11.
Bond prices were mixed after a successful auction of $28 billion of seven-year notes.
Weak demand at auctions earlier in the week raised concerns that the government might have to offer higher returns on bonds to lure in investors, which would have the negative effect of raising borrowing costs on loans such as mortgages.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.62 percent from 3.67 percent late Wednesday.
Light, sweet crude rose $3.57 to settle at $66.92 a barrel on the New York Mercantile Exchange after tumbling 6 percent Wednesday on fears economic growth in China would slow and curb demand for resources. - AP
NEW YORK: Stocks added to an already impressive run Thursday as another round of earnings reports gave investors new reasons to be optimistic about the U.S. economy.
The Dow Jones industrial average rose its highest level in nearly nine months with a gain of 84 points and the Nasdaq composite index traded above 2,000 for the first time since October.
The latest reports struck on a theme that has played out for weeks: Times are tough but companies aren't doing as badly as had been feared. Many have chopped costs to produce profits well beyond the market's modest expectations.
Motorola Inc. said it used deep cost cuts to wring a profit from its latest quarter.
Analysts had expected a loss.
Goodyear Tire & Rubber's shortfall was half what had been expected and Dow Chemical Co.'s CEO said he believes the U.S. economy "has found bottom."
A surprise drop in the number of people continuing to seek unemployment benefits gave investors even more reason to put money into stocks.
With one day to go, the Dow is up 8.4 percent this month, its strongest July since 1989, when it gained 9 percent.
A much-anticipated report on the overall output of the economy is sure to drive the market's direction on Friday.
Stocks are up 13 percent since July 13 when investors bet correctly that Goldman Sachs Group Inc. would report enormous earnings.
Since then, other profit reports have brought hope that the longest recession since World War II might end this year.
AT&T Inc., chip maker Intel Corp. and heavy equipment maker Caterpillar Inc. all posted results that outran expectations.
Three out of four companies in the S&P 500 index that reported second-quarter results so far have topped analysts' expectations, according to Thomson Reuters. About 300 of the 500 companies have reported.
Analysts said the end of the month is pressuring money managers and traders to show they have kept up with July's steep rally. Often, the summer months are quieter than the rest of the year on Wall Street as traders take vacations.
Some of the buying is likely tied to short-covering, where investors have to buy stock after having earlier sold borrowed shares in a bet they would fall.
"People kind of got caught a little flat-footed here. The summer is supposed to be slow," said Jon Merriman, chief executive of Merriman Curhan Ford in San Francisco.
The Dow rose 83.74, or 0.9 percent, to 9,154.46 after being up as much as 176 points.
The Standard & Poor's 500 index rose 11.60, or 1.2 percent, to 986.75.
It rose to nearly 997 during the day.
It hasn't traded above 1,000 since November.
It was the highest close for the Dow and the S&P 500 index since Nov. 4.
The Nasdaq advanced 16.54, or 0.9 percent, to 1,984.30. It rose to nearly 2,010 in morning trading, its first move above 2,000 since Oct. 3.
The index is up 56 percent from its low of 1,269 in March.
It was the highest finish for the index since Oct. 1.
The Russell 2000 index of smaller companies rose 9.42, or 1.7 percent, to 557.80.
About for stocks rose for every one that fell on the New York Stock Exchange.
Volume came to 1.4 billion shares compared with 1.3 billion Wednesday.
Stocks made little progress in the four days prior to Thursday but some break in the buying had been expected after the steep gains.
Investors rewarded the latest companies to beat expectations. Motorola rose 62 cents, or 9.4 percent, to $7.19.
Goodyear rose $1.97, or 14.2 percent, to $15.86. Dow Chemical rose $1.26, or 6.2 percent, to $21.53.
General Electric Co. led the Dow Jones industrial average higher after a Goldman Sachs analyst raised his rating on the stock and predicted the industrial conglomerate won't have to split off its lending arm under financial industry reform proposals circulating in Congress.
The stock rose 85 cents, or 6.9 percent, to $13.11.
Bond prices were mixed after a successful auction of $28 billion of seven-year notes.
Weak demand at auctions earlier in the week raised concerns that the government might have to offer higher returns on bonds to lure in investors, which would have the negative effect of raising borrowing costs on loans such as mortgages.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.62 percent from 3.67 percent late Wednesday.
Light, sweet crude rose $3.57 to settle at $66.92 a barrel on the New York Mercantile Exchange after tumbling 6 percent Wednesday on fears economic growth in China would slow and curb demand for resources. - AP
Amanah Saham 1Malaysia open for subscription from Aug 5
Source: The Star Online
KUALA LUMPUR: Permodalan Nasional Bhd (PNB) will offer for subscription the RM10 billion Amanah Saham 1Malaysia, from August 5 at a fixed price of RM1 per unit.
This would be the largest fund offering to date by PNB.
Prime Minister Datuk Seri Najib Razak said at the launch of the fund Friday that the fresh injection of liquidity would boost the equities market as well as other investment instruments
KUALA LUMPUR: Permodalan Nasional Bhd (PNB) will offer for subscription the RM10 billion Amanah Saham 1Malaysia, from August 5 at a fixed price of RM1 per unit.
This would be the largest fund offering to date by PNB.
Prime Minister Datuk Seri Najib Razak said at the launch of the fund Friday that the fresh injection of liquidity would boost the equities market as well as other investment instruments
Thursday, July 30, 2009
Share Prices End On Mixed Note
Source: Bernama.Com
KUALA LUMPUR, July 30 (Bernama) -- Share prices on Bursa Malaysia were mixed at close as investors shifted interest from bluechips to the lower liners, dealers said.The bluechips were weaker due to follow through profit taking from yesterday while the lower liners saw some buying interest."I think the CI now is under technical correction and it could hit a bottom of 1,134 before we see a rebound," said SJ Securities's technical analyst Phua Kwee Hock.He said investors will also be looking at US economic data namely the unemployment data and the second quarter gross domestic product growth, which is due for release later Thursday.
"Overall, the market expects the US data to be neutral but we never know," he said, adding that the market was anticipating a contraction in the US GDP but not more than 1.5 percent.
The FTSE Bursa Malaysia Kuala Lumpur Composite Index closed lower by 3.82 points lower today at 1,160.66, after opening 0.73 point lower at 1,163.75.The Finance Index went up 1.899 points to 9,477.6, the Plantation Index fell 24.85 points to 5,598.83 while the Industrial Index eased 25.03 points at 2,537.0.The FBMEmas Index dropped 7.71 points to 7,836.66, the FBM Top 100 decreased 14.08 points to 7,621.58, the FBMMesdaq Index jumped 34.71 points to 4,144.87 and the FBM2BRD Index rose 63.33 points to 5,234.29.Advancers beat decliners by 353 to 240 while 254 counters were unchanged, 385 untraded and 32 others suspended.Leading the actives, KNM Group inched up one sen to 87.5 sen while SAAG Consolidated and Tebrau Teguh added half a sen each to 28.5 sen and 83.0 sen respectively.Newly-listed oil and gas crane services provider and manufacturer, Handal Resources surged 44 sen to RM1.16 at close after making a debut on the second board with a 18-sen premium at 90 sen today.Among heavyweights, Sime Darby slipped 10 sen to RM8.00, Maybank eased five sen to RM6.50, Bumiputra-Commerce rose 10 sen to RM10.30 and Tenaga increased five sen to RM8.15.
The Main Board volume decreased to 615.100 million shares worth RM1.396 billion compared with 1.131 billion shares valued at RM1.913 billion on Wednesday.Turnover on the Second Board increased to 84.188 million shares worth RM62.509 million versus 79.820 million shares worth RM30.525 million previously.The Mesdaq volume however rose to 53.314 million shares worth RM9.964 million from 38.150 million shares valued at RM5.899 million.Warrants went down to 30.089 milion units worth RM4.659 million from 47.188 million units worth RM9.545 million previously.On a sectoral basis, consumer products accounted for 27.581 million shares traded on the Main Board, industrial products 127.243 million, construction 47.422 million, trade/services 203.009 million, technology 14.418 million, infrastructure 22.561 million, finance 57.353 million, hotels 1.026 million, properties 81.365 million, plantations 28.658 million, mining 406,000, REITs 4.002 million and closed/fund 52,100.
KUALA LUMPUR, July 30 (Bernama) -- Share prices on Bursa Malaysia were mixed at close as investors shifted interest from bluechips to the lower liners, dealers said.The bluechips were weaker due to follow through profit taking from yesterday while the lower liners saw some buying interest."I think the CI now is under technical correction and it could hit a bottom of 1,134 before we see a rebound," said SJ Securities's technical analyst Phua Kwee Hock.He said investors will also be looking at US economic data namely the unemployment data and the second quarter gross domestic product growth, which is due for release later Thursday.
"Overall, the market expects the US data to be neutral but we never know," he said, adding that the market was anticipating a contraction in the US GDP but not more than 1.5 percent.
The FTSE Bursa Malaysia Kuala Lumpur Composite Index closed lower by 3.82 points lower today at 1,160.66, after opening 0.73 point lower at 1,163.75.The Finance Index went up 1.899 points to 9,477.6, the Plantation Index fell 24.85 points to 5,598.83 while the Industrial Index eased 25.03 points at 2,537.0.The FBMEmas Index dropped 7.71 points to 7,836.66, the FBM Top 100 decreased 14.08 points to 7,621.58, the FBMMesdaq Index jumped 34.71 points to 4,144.87 and the FBM2BRD Index rose 63.33 points to 5,234.29.Advancers beat decliners by 353 to 240 while 254 counters were unchanged, 385 untraded and 32 others suspended.Leading the actives, KNM Group inched up one sen to 87.5 sen while SAAG Consolidated and Tebrau Teguh added half a sen each to 28.5 sen and 83.0 sen respectively.Newly-listed oil and gas crane services provider and manufacturer, Handal Resources surged 44 sen to RM1.16 at close after making a debut on the second board with a 18-sen premium at 90 sen today.Among heavyweights, Sime Darby slipped 10 sen to RM8.00, Maybank eased five sen to RM6.50, Bumiputra-Commerce rose 10 sen to RM10.30 and Tenaga increased five sen to RM8.15.
The Main Board volume decreased to 615.100 million shares worth RM1.396 billion compared with 1.131 billion shares valued at RM1.913 billion on Wednesday.Turnover on the Second Board increased to 84.188 million shares worth RM62.509 million versus 79.820 million shares worth RM30.525 million previously.The Mesdaq volume however rose to 53.314 million shares worth RM9.964 million from 38.150 million shares valued at RM5.899 million.Warrants went down to 30.089 milion units worth RM4.659 million from 47.188 million units worth RM9.545 million previously.On a sectoral basis, consumer products accounted for 27.581 million shares traded on the Main Board, industrial products 127.243 million, construction 47.422 million, trade/services 203.009 million, technology 14.418 million, infrastructure 22.561 million, finance 57.353 million, hotels 1.026 million, properties 81.365 million, plantations 28.658 million, mining 406,000, REITs 4.002 million and closed/fund 52,100.
Unit trust industry expected to grow 25% to 30%
Source: DALJIT DHESI (THE STAR ONLINE)
PETALING JAYA: The net asset value (NAV) of the unit trust industry is expected to chart 25% to 30% growth this year underpinned by growing investor confidence from improving global capital markets, according to Federation of Investment Managers Malaysia (FIMM) president Tunku Ya’acob Tunku Abdullah.
He said the 25% to 30% improvement in NAV for the year was a reasonable expectation, given the country’s strong economic fundamentals.
As at end-June, the NAV of the industry was RM164bil, an increase of about 22% against RM134bil at end-2008. NAV refers to the value of the underlying assets held by a fund, minus liabilities.
Tunku Ya’acob said the recent stabilisation and gradual improvement in the world capital markets would bring about better investor sentiment.
Once confidence was restored, investors would be more comfortable taking on higher risk levels, he added. He said to date, there had been no major redemptions or panic selling of unit trust funds by investors in Malaysia compared with other markets worldwide.
“According to Bank Negara’s statistics as at April, there was more than RM300bil in savings and fixed deposit accounts. In view of the current low interest rate environment, some of these funds will eventually find their way into unit trust funds which offer better growth potential,” he said in an email reply.
MAAKL Mutual Bhd CEO Wong Boon Choy said the company expected to see continued improvement in investor confidence in the second half of this year.
The Government’s stimulus packages and their related multiplier effects would help cushion the impact of the sharp external downturn and set the stage for economic recovery in the second half year, he added.
Public Mutual Bhd CEO Yeoh Kim Hong said with risk aversion receding, investors were now selectively repositioning their portfolios to participate in the market uptrend.
This had helped the industry pick up in terms of NAV and sales of equity funds, she said, adding that the company expected the industry to remain resilient in the second half year.
However, HwangDBS Investment Management Bhd head of equities Gan Eng Peng felt that the investment appetite of investors had been affected in the last few months as only a small number was focused on making money, opting instead to preserve wealth and “bullet proof” their finances and businesses.
On fund performance, Tunku Ya’acob said judging from the six-month data, local conventional and Islamic equity funds had been doing relatively well.
“Over the six-month period, the conventional or non-Islamic equity fund sector gave an average return of about 17%. Over the same period, the local Islamic equity fund sector recorded an average return of about 16%,” he noted.
Yeoh said on a year-to-date basis, funds invested in regional markets had outperformed those invested solely in the local market as regional markets had broadly outperformed the domestic market.
Selected sector funds such as real estate funds had outperformed other funds as the regional property markets had stabilised, she added.
Gan said the new stock exchange barometer, the FTSE Bursa Malaysia KL Composite Index (FBM KLCI), was expected to further lift the industry in terms of institutional investor participation.
Institutional investors would not confine their investment portfolio to the 30 counters but also tap the larger opportunities available in the market, he said, referring to the 30 index-linked stocks that make up the FBM KLCI.
According to Wong, the soon-to-be-launched online electronic system, known as E-Pilihan Pelaburan Ahli (E-PPA) for the withdrawal of EPF savings for members to invest in unit trusts, will also help improve the industry’s growth.
The new system is expected to cut the current withdrawal process time from one to two weeks currently to three to five days.
Tunku Ya’acob said investor education was essential to push the industry to a higher level as it was vital for investors to understand the merits of investing early and for the long term.
To better communicate the risk profile of each fund to investors, FIMM has introduced the Fund Volatility Factor (FVF) disclosure for unit trust funds of at least three years.
The FVF is a measure of the rise and fall of a fund’s returns over a period of time relative to its average returns.
Citibank to expand branches
Source: The Star Online
KUALA LUMPUR: Citibank Bhd, the locally incorporated subsidiary of Citigroup Inc, will set up another four branches in the country early next year from the current seven.
Citigroup chief executive officer Vikram Pandit, on a tour of the US-based financial services group’s Asian operations, told reporters Thursday this was part of the strategy to expand the footprint here.
Pandit, according to Bloomberg, was visiting employees in Malaysia, Singapore and Hong Kong to boost confidence following the departure of the group’s regional head Ajay Banga.
Citigroup made a US$28 billion loss last year as a result of the financial crisis.
Meanwhile, Citibank chief executive officer Sanjeev Nanavati said the bank would submit an official application soon to set up an Islamic subsidiary.
KUALA LUMPUR: Citibank Bhd, the locally incorporated subsidiary of Citigroup Inc, will set up another four branches in the country early next year from the current seven.
Citigroup chief executive officer Vikram Pandit, on a tour of the US-based financial services group’s Asian operations, told reporters Thursday this was part of the strategy to expand the footprint here.
Pandit, according to Bloomberg, was visiting employees in Malaysia, Singapore and Hong Kong to boost confidence following the departure of the group’s regional head Ajay Banga.
Citigroup made a US$28 billion loss last year as a result of the financial crisis.
Meanwhile, Citibank chief executive officer Sanjeev Nanavati said the bank would submit an official application soon to set up an Islamic subsidiary.
Wednesday, July 29, 2009
DiGi named most innovative firm
Source: The Star Online
SHAH ALAM: DiGi Telecommunications Sdn Bhd has been named Malaysia’s most admired company for innovation by Wall Street Journal Asia for the third year running .
In a statement, the company said the Asia 200 Most Admired Companies survey also graded DiGi number three in the overall ranking of Malaysia’s Top 10 companies, up a notch from last year
DiGi was listed third for the Long-term Vision category and fifth for Quality.
The survey covered Asian companies that traded on stock exchanges as well as multinational companies that did extensive business in the region.
DiGi chief executive officer Johan Dennelind said the company was passionate about exceeding its customers’ expectations.
“For us, innovation is about bringing meaningful differences to our customers by making our mobile and internet services relevant, easy and affordable,” he said.
He said the company was thrilled with this recognition and would continue to push the boundaries in ensuring excellent customer experience
Government approves more lottery games
Source: Rachael Kam (The Star Online)
Move will curb rise in illegal gaming operators
PETALING JAYA: All three number forecast operators (NFOs) in the country will benefit in the longer term as the government tries to curb a rise in illegal gaming by increasing the number of legal lottery games, although Berjaya Sports Toto Bhd (BToto) may face some initial pressure from new games awarded to its rivals, analysts said.
Multi-Purpose Holdings Bhd’s 51% subsidiary, Magnum Corp Sdn Bhd, has received approval for a new 4-digit (4D) game which will incorporate a jackpot element, slated to be launched at end-2009, Multi-Purpose told Bursa last Friday.
The move will certainly reduce the market share of illegal operators, and hence benefit all the NFOs in the long run, said OSK Research.
The illegal numbers market is estimated at 1-to-1.5 times that of the legal NFO market, which was valued at about RM8bil as at end-2008, according to OSK Research.
“Given that Magnum has the single largest market share in the 4D game and that the game is known to be the most popular in the illegal NFO market, we expect this move to give a significant boost to Magnum’s revenue growth,” the brokerage told clients in a research note.
The research house said the government had always resisted the move to increase gaming taxes as it would only give leeway for illegal operators to gain market share at the expense of the legal operators.
“The latest move to offer a jackpot element in the 4D game is a signal that the government remains serious in reducing the leakages to illegal operators,” OSK said, noting that illegal operators were unable to offer jackpots where the roll-over sum was typically too high for an illegal operator to match.
Gaming and corporate taxes are estimated to amount to more than RM1.5bil per annum.
OSK said although the approval of the new 4D game for Magnum might result in BToto facing a marginal slip in its market share, especially for its 4D games, it was unlikely to cause a drastic drop in BToto’s revenue growth.
“BToto’s non-4D games have a significantly higher matrix and hence the tendency for a higher jackpot roll-over element, which is the main contributor of the group’s super-normal growth rates,” the brokerage noted.
Currently, BToto’s 4D games contribute about 70% to 75% of its total NFO revenue.
OSK reckons that Tanjong Plc, which runs its gaming operations via Pan Malaysian Pools Sdn Bhd, may get a share of the action.
“We believe that the government may also offer a jackpot element in Tanjong’s 3D and potentially, 4D games, so as to be seen as providing a more level playing field for NFO operators,” it said.
OSK has maintained its “overweight” rating on the sector, and recommended a “buy” call on Tanjong with a target price of RM18.60.
It pegged BToto at a target price of RM5.60 and expected the company to remain a defensive, high-dividend yield play.
HwangDBS Vickers Research agrees that the policy makers’ initiatives to introduce more measures in the NFO industry is crucial to help players regain lost ground due to the rise in illegal gaming activities.
“As such, it is likely that Tanjong (rated ‘buy’) may also receive approval for a new game for its gaming operation,” the research house said in a note.
“We believe that the potential impact on the new games would be minimal on Tanjong’s bottom line, especially in the first one to two years of the operation,” HwangDBS said.
The brokerage believes investors should continue to focus on Tanjong’s strong fundamentals with resilient earnings from both its NFO and power generation businesses, and an attractive net yield of 5%.
It has maintained a “buy” call on Tanjong with a target price of RM19.25.
Malaysia's benchmark interest rate likely to stay
Source: Yeow Pooi Linf (The Star Online)
Economists say Bank Negara may take a wait-and-see stance
PETALING JAYA: Bank Negara is expected to keep the benchmark interest rate unchanged at 2% at its monetary policy meeting today, say economists contacted by StarBiz.
David Cohen, an economist with Action Economics in Singapore, said the central bank could afford to “wait-and-see” since inflationary pressures had eased while economic indicators of regional economies were showing improvement.
“Things have bottomed out regionally and I suspect that Malaysia will follow in the same trend,” he said in a telephone interview.
Cohen, nonetheless, cautioned that there were still a lot of uncertainties within the world economies and if Malaysia’s economic data continued to weaken, Bank Negara might have to reduce rates further.
RAM Holdings Bhd economist Dr Yeah Kim Leng concurred, adding that the central bank would “keep its fingers on the trigger but not pull it yet as the bullet will come in handy” if there were signs that the global or domestic economy were heading towards a “double-dip” recovery.
So far, the strong monetary, financial and fiscal policy responses rolled out simultaneously across the world have helped avert a global depression in the first-half year. China, for example, saw a gross domestic product growth of 7.9% in the second quarter, he said.
Malaysia’s contraction in output and export, like its regional export-oriented peers, had slowed down while consumer and investor confidence was on the upturn, as reflected by the recent stock market performance, he added.
Business investment in the real economy, meanwhile, might still be held back by lingering concerns over the possibility of a slip-up in the recovery process of the United States and European economies, Yeah said.
Forecast Pte Ltd economist Joanna Tan also believed that Bank Negara was likely to keep rates unchanged but added that the downtrend in inflation had increased the scope for monetary easing.
“Given previous rhetoric on frontloading of rates and the impact of fiscal stimulus in the second half of the year, Bank Negara is likely to keep rates unchanged while monitoring closely the growth-inflation situation,” she said.
Yeah said Bank Negara had much room to cut rates further if domestic demand were to deteriorate more than expected, given that inflation rate had slipped into negative territory in June (minus 1.4%) mainly due to higher base-effect.
Maybank Investment Bank economist Suhaimi Ilias, however, considered the present level of record low overnight policy rate sufficient since global and local economies were showing signs of bottoming and turning around.
The policy focus would be on availability rather than cost of credit, hence the measures like government guaranteed scheme for loans for working capital and industrial restructuring, as well as bonds like Danajamin and microcredit initiatives, he said.
Economists say Bank Negara may take a wait-and-see stance
PETALING JAYA: Bank Negara is expected to keep the benchmark interest rate unchanged at 2% at its monetary policy meeting today, say economists contacted by StarBiz.
David Cohen, an economist with Action Economics in Singapore, said the central bank could afford to “wait-and-see” since inflationary pressures had eased while economic indicators of regional economies were showing improvement.
“Things have bottomed out regionally and I suspect that Malaysia will follow in the same trend,” he said in a telephone interview.
Cohen, nonetheless, cautioned that there were still a lot of uncertainties within the world economies and if Malaysia’s economic data continued to weaken, Bank Negara might have to reduce rates further.
RAM Holdings Bhd economist Dr Yeah Kim Leng concurred, adding that the central bank would “keep its fingers on the trigger but not pull it yet as the bullet will come in handy” if there were signs that the global or domestic economy were heading towards a “double-dip” recovery.
So far, the strong monetary, financial and fiscal policy responses rolled out simultaneously across the world have helped avert a global depression in the first-half year. China, for example, saw a gross domestic product growth of 7.9% in the second quarter, he said.
Malaysia’s contraction in output and export, like its regional export-oriented peers, had slowed down while consumer and investor confidence was on the upturn, as reflected by the recent stock market performance, he added.
Business investment in the real economy, meanwhile, might still be held back by lingering concerns over the possibility of a slip-up in the recovery process of the United States and European economies, Yeah said.
Forecast Pte Ltd economist Joanna Tan also believed that Bank Negara was likely to keep rates unchanged but added that the downtrend in inflation had increased the scope for monetary easing.
“Given previous rhetoric on frontloading of rates and the impact of fiscal stimulus in the second half of the year, Bank Negara is likely to keep rates unchanged while monitoring closely the growth-inflation situation,” she said.
Yeah said Bank Negara had much room to cut rates further if domestic demand were to deteriorate more than expected, given that inflation rate had slipped into negative territory in June (minus 1.4%) mainly due to higher base-effect.
Maybank Investment Bank economist Suhaimi Ilias, however, considered the present level of record low overnight policy rate sufficient since global and local economies were showing signs of bottoming and turning around.
The policy focus would be on availability rather than cost of credit, hence the measures like government guaranteed scheme for loans for working capital and industrial restructuring, as well as bonds like Danajamin and microcredit initiatives, he said.
Tips for retail investors to stop losing money in stock market
Source: Ooi Kok Hwa (Star Online)
IN the stock market, there are two main types of investors – smart investors and retail investors. While smart investors have been able to make money from the stock market, the majority of retail investors suffer losses most of the time.
As the market saying goes, only one out of 10 investors can make money from the stock market. The rest always incur losses in the stock market.
Some retail investors believe they can make quick money from the stock market. They believe that investing in the stock market is one of the best ways to accumulate wealth in a short period of time.
However, due to lack of proper financial training, investing knowledge and intelligence, they always find themselves at the losing end. When they are excited about investing, the stock market may be nearing to the peak.
On the other hand, when they are suffering losses, losing patience about investing and intending to cut their losses in the stock market, the market may be touching the bottom, and that, in fact, is supposed to be the best time to invest.
A majority of retail investors seldom pay attention to the stock market. They will only start doing so when newspapers or TV news headlines show that the market is touching a new high.
Driven by greed and the thought of making fast money, they will follow their friends or tips from their brokers to invest without paying much attention to the fundamentals of the stocks.
Due to lack of discipline to cut losses, more often than not, they find themselves holding on to a lot of poor quality stocks when the market collapses to a very low level.
We believe that the majority of retail investors do buy a mixture of good and poor quality stocks. However, they tend to hold on to poor quality stocks and sell the good ones when the stock market collapses.
This is because when the stock market crashes, poor quality stocks will drop much faster than good fundamental stocks.
Most retail investors find it difficult to sell poor quality stocks as the stocks may drop far lower their buying prices within a short period of time.
As retail investors refuse to admit their mistakes, they will hold on to these stocks, hoping to break even again in the future.
Unfortunately, they overlook one important market saying, which is: What goes up may come down, what goes down may never go up.
We may have emotional feelings about stocks but we should not refer to our purchase prices to determine whether we can cut our losses.
Our purchase prices are only important to us; they mean nothing to the overall market.
As our purchase prices may be much higher than those of other investors, even though we may not be able to sell the stocks, other investors, especially the company owners, can still liquidate their stocks.
We need to be careful when trading in speculative stocks especially those with prices that are much higher than the book values of the companies. The book value of a company reflects the owners’ costs in the company.
Hence, even though the stock prices tumble to a very low level, as long as the prices are still higher than the book values, a lot of company owners can still liquidate the stocks as their market prices are still higher than the cost invested.
For example, assuming the stock of a company is at the book value of only 30 sen and the stock price before the rally is 50 sen.
Due to the bullish sentiment and speculative play, the stock price may be pushed up to RM3. If our purchase price in the company is RM2, selling lower than RM2 means cutting a loss.
However, unfortunately, a lot of retail investors, instead of cutting losses continue to average down their purchase prices.
They may start averaging down their purchase prices at RM1.50, RM1, 80 sen and 50 sen.
If the company has poor fundamentals and has been incurring huge losses over a long period of time, averaging down our purchase prices this way means we will be incurring more losses.
While we are doing this, the owner of company can still sell the stock at 50 sen as his investment cost is only 30 sen!
Malaysia market set to test 1,200-point level
Source: YVONNE TAN (The Star Online)
FBM KLCI rises for fifth day to finish at one-year high
PETALING JAYA: The current liquidity run may push the benchmark index beyond the 1,200-point level “soon” but concerns are mounting that the market may have become too expensive.
“It (the index testing 1,200) could be as early as August.
“There’s a lot of money out there in search of returns in the current low-interest rate environment,” said Pong Teng Siew, head of research at Jupiter Securities.
The FTSE Bursa Malaysia KL Composite Index (FBM KLCI) raced on for the fifth day yesterday to finish at a fresh one-year high, up 15.95 points to 1,172.38.
Nineteen stocks in the 30-stock index ended higher. Around 1.1 billion shares changed hands in trades valued at RM1.63bil.
At current levels, the market was priced at 17 times price-earnings to 2009 earnings, which was the level reached during the bull run in 2007. “Valuations are looking a bit too rich,” Pong said.
Since the start of July, the index has risen some 9%, extending the rally which started in April. Year-to-date, it has surged more than 30%.
Chris Eng, head of research at OSK Research, has advised traders to “sell into strength”.
“It (the index reaching 1,200) could be sooner than we earlier expected,” said AmResearch managing director and regional head of equity research Benny Chew.
He said the current rally could also be fuelled by high hopes that corporate earnings would be positive in August.
AmResearch has said the FBM KLCI would achieve 1,190 points by the first quarter of next year. Corporate earnings were expected to post a 17% growth next year from a contraction of 8% this year, the house said.
“I think the liquidity run will carry into the next month or so; (and) any correction should be ‘gentle’,” Pong said.
At Bursa Malaysia, major gainers yesterday were mainly blue chips which make up the index. Among the gainers were Sime Darby Bhd which added 25 sen to RM8.15, British American Tobacco Bhd which ended up 25 sen to RM45.25 and IOI Corp Bhd which finished 22 sen higher at RM5.
Major losers included PPB Group Bhd and Petronas Gas Bhd, which lost 20 sen and 10 sen to RM14.30 and RM10.20 respectively.
Among the more actively traded stocks were KNM Group Bhd, TA Enterprise Bhd and Lion Corp Bhd.
Stock markets across the globe have rallied in recent weeks bolstered by strong gains on Wall Street which were fuelled by better-than-expected corporate earnings.
Regionally, markets were mainly up yesterday. Singapore’s Straits Times Index and Hong Kong’s Hang Seng Index finished up 1.84% each.
Separately, at a function yesterday, Bursa Malaysia Bhd chief executive officer Datuk Yusli Mohamed Yusoff said the merger of the main and second boards was on track for the launch on Aug 3.
“We’ve tested it, all systems are ready,” he said.
He said he hoped the new structure would be more facilitative of new listings.
“We would like to see some of the small and medium companies merge. Based on feedback, we believe foreign investors would like to see much bigger companies in the market,” he said.
BURSA MALAYSIA: KL Shares Up, Hit New High At Close
Source: Bernama.Com
KUALA LUMPUR, July 28 (Bernama) -- Share prices on Bursa Malaysia ended higher with the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI), hitting a new high Tuesday with interest centred on key heavyweights, especially finance and plantation stocks, dealers said.
At 5.00pm, the FBM KLCI rose 15.95 points to a year high of 1,172.38, after opening 1.4 points higher at 1,157.83. It saw an intra-day high of 1,174.01.
Jupiter Securities head of research, Pong Teng Siew, attributed the gains mainly to the new flush of liquidity in the market.
"The participation in our market came mainly from local investors and some foreign participants," he said, adding that the local stocks still had more room to grow.
Pong expects the resistance level to be between 1,200 and 1,220 in the near term.
"We still have between 30-50 points to go," he said.
The Finance Index soared 105.14 points to 9,512.77, the Plantation Index surged 141.78 points to 5,687.94 and the Industrial Index was 19.63 points higher at 2,565.82.
The FBMEmas Index advanced 103.69 points to 7,905.20, the FBM Top 100 increased 100.83 points to 7,689.37, the FBMMesdaq Index jumped 29.66 points to 4,150.32 and the FBM2BRD Index advance 32.09 points to 5,236.25.
Advancers beat decliners by 492 to 192 while 249 counters were unchanged, 299 untraded and 32 others suspended.
Total volume went up to 1.123 billion shares worth RM1.633 billion from yesterday's 987.228 million shares valued at RM1.215 billion.
Topping the actives, KNM eased one sen to 89.5 sen, Lion Corporation increased 2.5 sen to 52 sen, SAAG Consolidated eased half a sen to 29.5 sen and Genting jumped 12 sen to RM3.
Among heavyweights, Sime Darby increased 25 sen, Maybank and Bumiputra-Commerce jumped 10 sen each to RM6.55 and RM10.20 respectively while Tenaga advanced five sen to RM8.10.
The Main Board volume declined to 933.135 million shares valued at RM1.571 billion from yesterday's 987.228 million shares worth RM1.215 billion.
Turnover on the Second Board eased to 94.278 million shares valued at RM41.503 million from 220.272 million shares worth RM80.632 million yesterday.
The Mesdaq volume decreased to 28.707 million shares valued at RM5.171 million from 33.515 million shares worth RM55.464 million.
Warrants increased to 60.233 million units worth RM12.716 million from 30.311 million worth RM66.130 million previously.
On a sectoral basis, consumer products accounted for 54.241 million shares traded on the Main Board, industrial products 226.592 million, construction 65.542 million, trade/services 324.814 million, technology 14.346 million, infrastructure 26.424 million, finance 80.917 million, hotels 7.108 million, properties 98.397 million, plantations 30.204 million, mining 197,000, REITs 4.093 million and closed/fund 256,600.
KUALA LUMPUR, July 28 (Bernama) -- Share prices on Bursa Malaysia ended higher with the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI), hitting a new high Tuesday with interest centred on key heavyweights, especially finance and plantation stocks, dealers said.
At 5.00pm, the FBM KLCI rose 15.95 points to a year high of 1,172.38, after opening 1.4 points higher at 1,157.83. It saw an intra-day high of 1,174.01.
Jupiter Securities head of research, Pong Teng Siew, attributed the gains mainly to the new flush of liquidity in the market.
"The participation in our market came mainly from local investors and some foreign participants," he said, adding that the local stocks still had more room to grow.
Pong expects the resistance level to be between 1,200 and 1,220 in the near term.
"We still have between 30-50 points to go," he said.
The Finance Index soared 105.14 points to 9,512.77, the Plantation Index surged 141.78 points to 5,687.94 and the Industrial Index was 19.63 points higher at 2,565.82.
The FBMEmas Index advanced 103.69 points to 7,905.20, the FBM Top 100 increased 100.83 points to 7,689.37, the FBMMesdaq Index jumped 29.66 points to 4,150.32 and the FBM2BRD Index advance 32.09 points to 5,236.25.
Advancers beat decliners by 492 to 192 while 249 counters were unchanged, 299 untraded and 32 others suspended.
Total volume went up to 1.123 billion shares worth RM1.633 billion from yesterday's 987.228 million shares valued at RM1.215 billion.
Topping the actives, KNM eased one sen to 89.5 sen, Lion Corporation increased 2.5 sen to 52 sen, SAAG Consolidated eased half a sen to 29.5 sen and Genting jumped 12 sen to RM3.
Among heavyweights, Sime Darby increased 25 sen, Maybank and Bumiputra-Commerce jumped 10 sen each to RM6.55 and RM10.20 respectively while Tenaga advanced five sen to RM8.10.
The Main Board volume declined to 933.135 million shares valued at RM1.571 billion from yesterday's 987.228 million shares worth RM1.215 billion.
Turnover on the Second Board eased to 94.278 million shares valued at RM41.503 million from 220.272 million shares worth RM80.632 million yesterday.
The Mesdaq volume decreased to 28.707 million shares valued at RM5.171 million from 33.515 million shares worth RM55.464 million.
Warrants increased to 60.233 million units worth RM12.716 million from 30.311 million worth RM66.130 million previously.
On a sectoral basis, consumer products accounted for 54.241 million shares traded on the Main Board, industrial products 226.592 million, construction 65.542 million, trade/services 324.814 million, technology 14.346 million, infrastructure 26.424 million, finance 80.917 million, hotels 7.108 million, properties 98.397 million, plantations 30.204 million, mining 197,000, REITs 4.093 million and closed/fund 256,600.
Magnum’s new 4D game long-term gain for industry
Source: The Star Online
PETALING JAYA: Magnum Corp Sdn Bhd’s recently obtained approval for a new 4-digit (4D) game containing a jackpot element would benefit the numbers forecast operations (NFO) industry as it will reduce the market share of illegal operators.
Multi-Purpose Holdings Bhd (MPHB), which has a 51%-stake in the company, said in a filing to Bursa Malaysia last Friday that the game was scheduled for an end-2009 launch.
OSK Research Sdn Bhd analyst Keith Wee said in a report Tuesday that the Government’s approval of the new game was seen as a move to reduce the market share of illegal 4D game operators, which was estimated to be one to one-and-a-half times larger than the legal NFO market.
He said given the popularity of 4D games in the illegal NFO market, this latest move was a signal that the Government remained serious in reducing the market share of illegal number operators since increasing taxes would only provide opportunities for such operators to gain market share.
“Gaming and corporate taxes are estimated to amount to more than RM1.5 billion per annum,” Wee added.
He said over the longer term, the move would enhance the legal NFO market and provide a level playing field for the three listed NFO firms - Berjaya Sports Toto, MPHB and Tanjong plc.
PETALING JAYA: Magnum Corp Sdn Bhd’s recently obtained approval for a new 4-digit (4D) game containing a jackpot element would benefit the numbers forecast operations (NFO) industry as it will reduce the market share of illegal operators.
Multi-Purpose Holdings Bhd (MPHB), which has a 51%-stake in the company, said in a filing to Bursa Malaysia last Friday that the game was scheduled for an end-2009 launch.
OSK Research Sdn Bhd analyst Keith Wee said in a report Tuesday that the Government’s approval of the new game was seen as a move to reduce the market share of illegal 4D game operators, which was estimated to be one to one-and-a-half times larger than the legal NFO market.
He said given the popularity of 4D games in the illegal NFO market, this latest move was a signal that the Government remained serious in reducing the market share of illegal number operators since increasing taxes would only provide opportunities for such operators to gain market share.
“Gaming and corporate taxes are estimated to amount to more than RM1.5 billion per annum,” Wee added.
He said over the longer term, the move would enhance the legal NFO market and provide a level playing field for the three listed NFO firms - Berjaya Sports Toto, MPHB and Tanjong plc.
Tuesday, July 28, 2009
Bursa Malaysia To Introduce Commodity Murabahah House Next Month
Source: Bernama.Com
KUALA LUMPUR, July 28 (Bernama) -- Bursa Malaysia Bhd plans to introduce a fully electronic web-based Syariah commodity trading platform next month.
Its chief executive officer Datuk Yusli Mohamed Yusoff said the Commodity Murabahah House (CMH) is the world's first fully Syariah compliant commodity trading platform.
Initially, the commodity to be traded on CMH is crude palm oil, he told a press conference here Tueaday.
"We will start with domestic players. We expect participation from the Gulf Cooperation Council (GCC) countries early next year," he said.
Yusli said Bursa Malaysia spent a few million ringgit to develop CMH.
CMH is a Malaysian Islamic International Finance Centre initiative operated by Bursa Malaysia's fully Syariah compliant wholly-owned subsidiary, Bursa Malaysia Islamic Services Sdn Bhd.
It is an international spot commodity platform that facilitates commodity-based Islamic financing and investment transactions under the Syariah principles of Murabahah, Tawarruq and Musawwammah.
Trades will be ringgit-denominated but efforts are being undertaken to make it multi currency capable, providing more choice, access and flexibility for international financial institutions to participate.
Bursa Malaysia expects daily transactions of up to RM1 billion for CMH.
Bursa Malaysia and 26 palm oil suppliers, financials institutions and trading participants have signed a memorandum to participate in CMH.
KUALA LUMPUR, July 28 (Bernama) -- Bursa Malaysia Bhd plans to introduce a fully electronic web-based Syariah commodity trading platform next month.
Its chief executive officer Datuk Yusli Mohamed Yusoff said the Commodity Murabahah House (CMH) is the world's first fully Syariah compliant commodity trading platform.
Initially, the commodity to be traded on CMH is crude palm oil, he told a press conference here Tueaday.
"We will start with domestic players. We expect participation from the Gulf Cooperation Council (GCC) countries early next year," he said.
Yusli said Bursa Malaysia spent a few million ringgit to develop CMH.
CMH is a Malaysian Islamic International Finance Centre initiative operated by Bursa Malaysia's fully Syariah compliant wholly-owned subsidiary, Bursa Malaysia Islamic Services Sdn Bhd.
It is an international spot commodity platform that facilitates commodity-based Islamic financing and investment transactions under the Syariah principles of Murabahah, Tawarruq and Musawwammah.
Trades will be ringgit-denominated but efforts are being undertaken to make it multi currency capable, providing more choice, access and flexibility for international financial institutions to participate.
Bursa Malaysia expects daily transactions of up to RM1 billion for CMH.
Bursa Malaysia and 26 palm oil suppliers, financials institutions and trading participants have signed a memorandum to participate in CMH.
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