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.
Showing posts with label Malaysia. Show all posts
Showing posts with label Malaysia. Show all posts
Monday, August 17, 2009
Friday, August 7, 2009
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.
Tuesday, August 4, 2009
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.
Monday, July 20, 2009
Malaysia Public Bank eyes 14-15 pct FY09' loan growth
Source: Reuters (Soo Ai Peng)
Q2 net profit up 2.9 percent yr/yr
*Sees slight drop in net interest margin in H2
*Expects government guarantees to support FY2009 loan growth
*Shares up 1 percent after earnings
(Adds news conference, details)
By Soo Ai Peng
KUALA LUMPUR, July 20 (Reuters) - Malaysia's third-largest lender Public Bank (PUBM.KL) can grow its loan book by 14-15 percent this year but its net interest margin will likely be squeezed, said a top executive on Monday.
Public bank on Monday said net profits grew by 2.9 percent to 610.74 million ringgit ($172.2 million) in the second quarter from a year ago.
First-half net profit dropped 8 percent to 1.2 billion ringgit due to a one-off goodwill payment, it said.
The bank recorded 7.2 percent loan growth in the first half.
Loans for the financing of residential properties and passenger vehicles and lending to mid-market commercial enterprises accounted for 77 percent of total loans of 129.4 billion ringgit at the end of June.
The banking industry's loan book will continue to grow even as the Southeast Asian economy is expected to shrink 4-5 percent this year after the government said it will provide, as part of a stimulus package for the economy, guarantees on bank loans to small and medium enterprises.
Public Bank expects its full year loan growth to be double the industry's 7-8 percent growth but the faster growth may come at the expense of falling interest margin.
"Depending on how intense the margin is in the SME segment, we will probably expect a stable margin or a very slight drop in net interest margin," Public Bank Chief Operating Officer Leong Kwok Nyem told a news conference after the earnings release.
Malaysia announced a two-year economic boost comprising extra spending and loan guarantees worth 67 billion ringgit that will bring its fiscal deficit to 7.6 percent this year.
Public Bank is the first Malaysian bank to report its April-June earnings. Top bank Maybank (MBBM.KL) and second-ranked CIMB Bank (BUCM.KL) are expected to announce results in August
Q2 net profit up 2.9 percent yr/yr
*Sees slight drop in net interest margin in H2
*Expects government guarantees to support FY2009 loan growth
*Shares up 1 percent after earnings
(Adds news conference, details)
By Soo Ai Peng
KUALA LUMPUR, July 20 (Reuters) - Malaysia's third-largest lender Public Bank (PUBM.KL) can grow its loan book by 14-15 percent this year but its net interest margin will likely be squeezed, said a top executive on Monday.
Public bank on Monday said net profits grew by 2.9 percent to 610.74 million ringgit ($172.2 million) in the second quarter from a year ago.
First-half net profit dropped 8 percent to 1.2 billion ringgit due to a one-off goodwill payment, it said.
The bank recorded 7.2 percent loan growth in the first half.
Loans for the financing of residential properties and passenger vehicles and lending to mid-market commercial enterprises accounted for 77 percent of total loans of 129.4 billion ringgit at the end of June.
The banking industry's loan book will continue to grow even as the Southeast Asian economy is expected to shrink 4-5 percent this year after the government said it will provide, as part of a stimulus package for the economy, guarantees on bank loans to small and medium enterprises.
Public Bank expects its full year loan growth to be double the industry's 7-8 percent growth but the faster growth may come at the expense of falling interest margin.
"Depending on how intense the margin is in the SME segment, we will probably expect a stable margin or a very slight drop in net interest margin," Public Bank Chief Operating Officer Leong Kwok Nyem told a news conference after the earnings release.
Malaysia announced a two-year economic boost comprising extra spending and loan guarantees worth 67 billion ringgit that will bring its fiscal deficit to 7.6 percent this year.
Public Bank is the first Malaysian bank to report its April-June earnings. Top bank Maybank (MBBM.KL) and second-ranked CIMB Bank (BUCM.KL) are expected to announce results in August
Property transactions expected to increase
Source: The Star Online (YEOW POOI LING)
This is due to the relaxation of the FIC rules, says foreign brokerage
PETALING JAYA: Bank earnings and loans growth are likely to improve towards the end of the year, bolstered by the recent deregulation of the Foreign Investment Committee (FIC) guidelines on properties as well as easing conditions for new listings and fund-raising activities.
According to a foreign brokerage, property transactions, both residential and commercial, are expected to increase following the relaxation of the FIC rules, which should spur demand for property financing.
Higher property financing would lead to a turnaround in loans growth by year’s end or early next year, it said, noting that property financing comprised 36.4% of total loans in the banking system.
“The policy changes will create more revenue streams for Malaysia’s financial sector and reduce dependency on pure interest income,” the foreign research house said, adding that loans growth in May was underpinned by the relatively stable household loans segment, which grew 8.4% year-on-year.
In addition, the liberalisation would also encourage more mergers and acquisitions (M&As), as well as more capital and equity market activities, which would benefit investment banks, it said. With greater foreign ownership allowed in stockbrokers, product innovation – such as the roll-out of more varied derivative products – is likely to improve.
The foreign research house added that Malaysia’s capital market was expected to gain better access to capital and investments with the removal of the 30% bumiputra equity requirement, making it more attractive for foreign listings while supporting existing listed companies seeking to raise funds.
A local bank-backed brokerage said residential mortgages showed “no signs of weakening” as they sustained 10% growth from December 2008 to May 2009 despite the gloomy economic landscape.
This was due to progressive release of housing loans approved in the past one to two years, high savings rate of Malaysians, sustainable property transactions thanks to limited speculation, low interest rates and attractive schemes by developers, it said.
Moreover, there could be more corporate deals in the pipeline, including new listings and M&A transactions on the back of improved average daily trading value on Bursa Malaysia, it said.
This would augur well for investment banking income, including brokerage and corporate advisory fees, the research house added.
HwangDBS Vickers Research, meanwhile, said the liberalisation was “very bold measures” to improve the competitiveness of Malaysia’s properties internationally.
“The biggest winners will be developers with large exposure to the more ‘open’ districts like the Federal Territory and Penang, where the authorities would likely be supportive,” it said.
Good response to new investment guidelines
Sources: The Star Online (YAP LENG KUEN)
PUTRAJAYA: The Government has received good response to the recently relaxed investment guidelines from potential investors in the Middle East, China and India.
“We have received enquiries related to Islamic finance, banking, construction, education, information technology, outsourcing, infrastructure and tourism,’’ Finance Ministry secretary-general Tan Sri Dr Wan Abdul Aziz Wan Abdullah told StarBiz.
Foreign investments this year are expected to be only half of last year’s figure, and the Government has stepped up efforts to facilitate the private sector to play a more active role in contributing to economic growth.
Private investment growth has slowed to an average of less than 5.1% a year since the Asian financial crisis of 1997/98 against 19.2% a year during 1990-1997. Some of the factors include:
rising costs of production leading to lower returns on capital;
● low levels of efficiency with inadequate investment in skills training, technology upgrading, and research and development; and
● skills and technical knowledge gap.
“Additionally, the continued dependence on cheap and low-skilled labour is a hindrance to moving up the value chain and attracting more capital-intensive investment,’’ Aziz said.
The Government recently liberalised the services sector, bumiputra equity guidelines as well as the fund management and stockbroking industries, and set up Danajamin Nasional Bhd to help viable companies tap the bond market.
Meanwhile, Government-linked companies will now focus on core activities and divest their non-core activities. This will enable greater private sector participation in the economy, while ensuring fair competition.
“All the measures announced are initial steps to boost private investment, both domestic as well as foreign, and contribute significantly to economic growth. The Government will introduce a new economic model which would transform Malaysia into a high-income economy,’’ Aziz said.
He said the Budget 2010, to be announced on Oct 23, would adopt a slightly different approach in view of the recent global financial crisis. “We are working with limited resources. There will be adjustments and sacrifices as we cannot meet all requests,’’ he said, adding that the approach would be outcome-based.
“It will be based on the outcome of a certain initiative rather than measuring of output,’’ he said.
For instance, in education, it would not be so much in terms of the number of higher learning institutions built but the quality of graduates who are employable.
Following the annual budget consultation on June 11, a series of focus group discussions will be held to look into issues, which include private investment, public transport, crime prevention and public safety, education, rural infrastructure, social safety net, human capital, fiscal consolidation and niche growth areas.
“This inclusive budgeting process helps ensure that the measures and resources allocated in the budget are well targeted and consistent with broad socio-economic objectives of the Government,’’ Aziz said.
Electricity tariff will go up only if gas price rises
Sources: The Star Online
KUALA LUMPUR: The electricity tariff increase will only be implemented if the gas price is raised by the Government, Tenaga Nasional Bhd (TNB) president and chief executive officer Datuk Seri Che Khalib Mohamad Noh said on Saturday.
He said the tariff increase was intended to cover higher operating costs as a result of the rise in fuel prices.
“For TNB, when the gas price goes up, we need to make adjustments to the tariffs,” he told reporters at the TNB Family Day gathering at headquarters level here.
Khalib said that when fuel prices came down, the electricity tariffs were also adjusted accordingly.
“The gas price is determined by the Government and if it is raised, then we need to adjust our tariffs to take that into account,” he said when asked about the possiblity of a tariff increase if the gas price is raised.
Energy, Green Technology and Water Minister Datuk Peter Chin Fah Kui said recently that the National Economic Advisory Council has made a decision on the revision of electricity tariffs in line with the fuel price movements.
He said that any electricity tariff increase would not affect the lower income group as the Government had reduced the rates by an average 3.7% to 31.31 sen per kilowatt hour from 32.5 sen, effective March 1, 2009.
Khalib said the current fuel prices were higher when compared to that at the beginning of this year. — Bernama
“The decision to look into the gas price, whether to increase or not, is up to the Government. The gas price in Malaysia is not the market price,” he said, adding that with the various subsidies given, the gas price was much lower than the market price.
“If we are to pay the market price, then the gas price and electricity tariffs will be much higher than what we are enjoying now,” he added.
On the Bakun hydroelectric power project, Che Khalib said companies interested to participate in undersea cable portion could submit their tenders early next year.
“Those who qualify or are capable can tender for it early next year under the open tender process,” he said, adding that the process to evaluate the tenders usually requires about six months.
The transmission cable and undersea cable project is reported to be worth between RM8bil and RM10bil, involving a 730km high-voltage direct transmission line and 670km undersea cable for the Bakun dam.
KUALA LUMPUR: The electricity tariff increase will only be implemented if the gas price is raised by the Government, Tenaga Nasional Bhd (TNB) president and chief executive officer Datuk Seri Che Khalib Mohamad Noh said on Saturday.
He said the tariff increase was intended to cover higher operating costs as a result of the rise in fuel prices.
“For TNB, when the gas price goes up, we need to make adjustments to the tariffs,” he told reporters at the TNB Family Day gathering at headquarters level here.
Khalib said that when fuel prices came down, the electricity tariffs were also adjusted accordingly.
“The gas price is determined by the Government and if it is raised, then we need to adjust our tariffs to take that into account,” he said when asked about the possiblity of a tariff increase if the gas price is raised.
Energy, Green Technology and Water Minister Datuk Peter Chin Fah Kui said recently that the National Economic Advisory Council has made a decision on the revision of electricity tariffs in line with the fuel price movements.
He said that any electricity tariff increase would not affect the lower income group as the Government had reduced the rates by an average 3.7% to 31.31 sen per kilowatt hour from 32.5 sen, effective March 1, 2009.
Khalib said the current fuel prices were higher when compared to that at the beginning of this year. — Bernama
“The decision to look into the gas price, whether to increase or not, is up to the Government. The gas price in Malaysia is not the market price,” he said, adding that with the various subsidies given, the gas price was much lower than the market price.
“If we are to pay the market price, then the gas price and electricity tariffs will be much higher than what we are enjoying now,” he added.
On the Bakun hydroelectric power project, Che Khalib said companies interested to participate in undersea cable portion could submit their tenders early next year.
“Those who qualify or are capable can tender for it early next year under the open tender process,” he said, adding that the process to evaluate the tenders usually requires about six months.
The transmission cable and undersea cable project is reported to be worth between RM8bil and RM10bil, involving a 730km high-voltage direct transmission line and 670km undersea cable for the Bakun dam.
Friday, July 17, 2009
Public Bank Earns First-Place Honors in Malaysia
By JAMES HOOKWAY (WSJ ONLINE)
Sometimes the old way of doing things is the best way of doing things. A few years ago, many investors overlooked Malaysia's Public Bank Bhd. It didn't get involved in the kind of exotic financial derivatives and credit swaps that recently have gotten so many other, higher-profile lenders into trouble. It was dull, reliable Public Bank, the place where ordinary Malaysians went to deposit their loans and apply for mortgages or loans to buy a new car.
Fast forward to today, and Public Bank's slow-but-sure way of doing things is back in favor as it continues to expand its business in Malaysia's consumer sector. It ranked as Malaysia's overall most-admired company in the Asia 200 survey of subscribers of The Wall Street Journal Asia and other businesspeople.
The company moved up from third place in the prior survey, with survey respondents moving it ahead of Nestlé (Malaysia) Bhd., the overall most-admired company in the prior survey. Nestlé (Malaysia) took second place this time, while DiGi Telecommunications Sdn. Bhd. took third.
In the survey, the readers and business people ranked Public Bank No. 1 in two of the five categories they are polled on, and they ranked it second in two others, and third in the fifth. Its top scores came in the categories of "financial reputation" and "management's long-term vision."
Nestlé (Malaysia) took first in "good company reputation" and "high-quality services and products," while mobile-phone company DiGi took the top spot in the category of "innovation in responding to customers needs."
Stock analysts in Malaysia said Public Bank's 79-year-old founder and chairman, Teh Hong Piow, gets the basics of the business right. Instead of setting his sights on new ways of making -- and losing -- money, he continues to build Public Bank's business by taking deposits and handing out loans.
People familiar with how the bank operates said the publicity-shy Mr. Teh still oversees dozens of loan applications a week, exhibiting the same attention to detail that enabled this former bank clerk to climb the corporate hierarchy in Malaysia to become one the country's most-respected business leaders. Public Bank now has 242 Public Bank branches in its home market, and the group has an additional 97 overseas branches in Hong Kong, China, Cambodia, Vietnam, Laos and Sri Lanka.
Equity analysts said Public Bank's success is built on its strength among ordinary consumers, particularly in extending personal loans and loans for mortgages, and Mr. Teh has introduced minimum service standards to keep people flowing through its doors. Standards include a maximum waiting time of two minutes and a promise of a quick turnaround on loan applications.
It seems dull, but, according to analysts, it works. Since 2000, Public Bank's share of the consumer-banking market in Malaysia has expanded to 15% from 6%.
One of the few Malaysian banks not to post a loss during the 1990s Asian financial crisis, Public Bank also conscientiously avoided borrowing from other banks in order to expand its lending base -- a mistake that has led to the collapse of several banks elsewhere, especially in Britain. "Public Bank does the basics right and its entire brand is built on that," said a banking analyst at a rival bank who prefers not to be identified.
After growing up in Singapore and learning to make ends meet by, among other things, selling cigarettes to Japanese troops during World War II, Mr. Teh joined Overseas Chinese Banking Corp. as a clerk when he was 20 years old. He worked hard, needless to say, and rose to head up Malayan Bank's Kuala Lumpur office in 1960. After a few years of that, and buying and selling real estate on the side, Mr. Teh used his savings to found Public Bank in 1966.
Since then, Public Bank has made significant headway in Malaysia's large ethnic Chinese population, many of whom have appreciated the bank's straightforward approach to doing business. At the same time, Public Bank also began moving into other areas, namely Islamic banking, a field in which Malaysia is becoming a global hub. It also has maintained its strength in other niche markets, such as providing loans for cars by using automated approval processes.
In 2008, the bank expanded its net profit 22% to reach 2.58 billion ringgit ($723.9 million) despite the onset of the global financial crisis and a dramatic export slump in Malaysia, a major supplier of electronics components and raw materials such as palm oil. Total loans expanded by 19% during the same period, with consumer deposits climbing 17% from 2007.
Surprisingly, perhaps, its nonperforming loan ratio fell to 0.86% of total loans at the end of 2008 from 1.23% the year before.
To be sure, it hasn't been all easy sailing for Public Bank, not least because Malaysia's economy is facing a severe contraction and consumers are tightening their belts and delaying purchases of big-ticket items such as cars. Prime Minister Najib Razak recently released a new government forecast that projected the economy to contract by between 4% and 5% this year -- worse than the government's earlier forecast of a contraction of as much as 1%.
That pessimism is reflected in the Asia 200 survey, in which 17% of Malaysian respondents stated they would spend significantly less this year. Forty-seven percent said they would spend somewhat less, while 28% said there would be no change in their spending. Only 3.4% said they would spend somewhat more and 4.4% said they would spend significantly more.
The deteriorating Malaysian economy has led some analysts to suggest that Public Bank may choose to strengthen its capital base. CLSA Asia-Pacific Markets said in a report released in March that Public Bank's relatively "weak" capital in relation to other banks in the region could undermine its standing. "Compared with regional peers, it will be perceived as more vulnerable to economic shocks," CLSA said.
Other research houses, such as Kuala Lumpur-based OSK Research, have suggested that investors use concerns about the bank's ability to maintain dividend payments amid the difficult economic environment to load up on Public Bank stock. Public Bank officials have said they will continue making dividend payouts and expect loan growth of 15% in 2009.
More recently, the global environment has improved and the rate of decline in Malaysia has slowed.
The bigger long-term question, perhaps, is what will happen at the bank when Mr. Teh eventually decides to step down.
Mr. Teh has been at the helm of Public Bank for 45 years now. His deputy, managing director Tay Ah Lek, is 65 years old, and may not be willing to put in years more of additional service at his age. Some analysts have suggested that when that transition eventually comes, Public Bank could be ripe for a takeover or merger, especially as Mr. Teh's children have chosen to work elsewhere.
Analysts who follow Public Bank say Mr. Teh's succession plans remain under tight lock and key.
BURSA MALAYSIA: KL Shares End Firmer On Positive Sentiment
Sources: Bernama.com.my 16th July 2009KUALA LUMPUR, July 16 (Bernama) -- Share prices on Bursa Malaysia ended firmer Thursday with the key index up 1.06 percent, spurred on by the strong performance of major regional bourses and a better-than-expected Chinese economy.
The benchmark FTSE Bursa Malaysia KLCI went up 11.64 points to close at 1,108.88 after trading at an intra-day high of 1,120.41. It had opened unchanged at 1,097.24.
The market saw heavy trading interest in lower liners and penny stocks which pushed the day's volume above 1.0 billion units.However, overall gains were limited as investors were seen locking in some profits.
The Finance Index climbed 69.87 points to 9,012.62, the Industrial Index went up 26.29 points to 2,423.31 and the Plantation Index advanced 23.14 points to 5,379.88.
The FBMEmas Index gained 75.58 points to 7,483.69, the FBM Top 100 firmed up 80.98 points to 7,280.29 and the FBM2BRD Index increased 40.72 points to 4,855.14.
The FBMMesdaq Index, was however, down 46.25 points at 4,030.12.
Advancers led decliners by 398 to 304 while 229 counters were unchanged, 326 untraded and 57 others suspended.
Overall trading volume stood at 1.666 billion shares worth RM2.139 billion, up from the 1.365 billion shares worth RM2.139 billion yesterday.
"The better than expected China's second quarter gross domestic product which expanded 7.9 percent, has helped to shore up investor sentiment,"a dealer said.
He added that the market action marks the end of correction and is ready to embark on a new turnaround.
Topping the actives, KNM Group edged up 1.5 sen to 85 sen while SAAG Consolidated eased half sen to 29 sen and Axiata Group advanced 15 sen to RM2.85.
Jaks Resources rose four sen to 90.5 sen and Talam was unchanged at 9.5 sen.
Among the heavyweights, PPB Group gained 50 sen to RM12.50, Malaysian Pacific Industries rose 20 sen to RM5.35 and AMMB Holdings rose 14 sen to RM3.80.
The Main Board volume went up to 1.398 billion shares worth RM2.076 billion compared with Wednesday's closing of 1.141 billion shares worth RM1.729 billion.
Turnover on the Second Board also increased to 95.502 million shares worth RM35.648 million from the 83.383 million shares worth RM35.725 million previously.
The Mesdaq volume rose slightly to 96.420 million shares worth RM13.654 million from 93.927 million shares worth RM14.511 million yesterday.
Warrants went up to 72.538 million shares worth RM11.887 million from 42.151 million shares worth RM6.507 million.
On a sectoral basis, consumer products accounted for 50.635 million shares traded on the Main Board, industrial products 303.357 million, construction 145.296 million, trade/services 472.862 million, technology 14.219 million, infrastructure 24.103 million, finance 92.461 million, hotels 8.129 million, properties 251.448 million, plantations 32.093 million, mining 87,000, REITs 3.054 million and closed/fund 88,000.
The benchmark FTSE Bursa Malaysia KLCI went up 11.64 points to close at 1,108.88 after trading at an intra-day high of 1,120.41. It had opened unchanged at 1,097.24.
The market saw heavy trading interest in lower liners and penny stocks which pushed the day's volume above 1.0 billion units.However, overall gains were limited as investors were seen locking in some profits.
The Finance Index climbed 69.87 points to 9,012.62, the Industrial Index went up 26.29 points to 2,423.31 and the Plantation Index advanced 23.14 points to 5,379.88.
The FBMEmas Index gained 75.58 points to 7,483.69, the FBM Top 100 firmed up 80.98 points to 7,280.29 and the FBM2BRD Index increased 40.72 points to 4,855.14.
The FBMMesdaq Index, was however, down 46.25 points at 4,030.12.
Advancers led decliners by 398 to 304 while 229 counters were unchanged, 326 untraded and 57 others suspended.
Overall trading volume stood at 1.666 billion shares worth RM2.139 billion, up from the 1.365 billion shares worth RM2.139 billion yesterday.
"The better than expected China's second quarter gross domestic product which expanded 7.9 percent, has helped to shore up investor sentiment,"a dealer said.
He added that the market action marks the end of correction and is ready to embark on a new turnaround.
Topping the actives, KNM Group edged up 1.5 sen to 85 sen while SAAG Consolidated eased half sen to 29 sen and Axiata Group advanced 15 sen to RM2.85.
Jaks Resources rose four sen to 90.5 sen and Talam was unchanged at 9.5 sen.
Among the heavyweights, PPB Group gained 50 sen to RM12.50, Malaysian Pacific Industries rose 20 sen to RM5.35 and AMMB Holdings rose 14 sen to RM3.80.
The Main Board volume went up to 1.398 billion shares worth RM2.076 billion compared with Wednesday's closing of 1.141 billion shares worth RM1.729 billion.
Turnover on the Second Board also increased to 95.502 million shares worth RM35.648 million from the 83.383 million shares worth RM35.725 million previously.
The Mesdaq volume rose slightly to 96.420 million shares worth RM13.654 million from 93.927 million shares worth RM14.511 million yesterday.
Warrants went up to 72.538 million shares worth RM11.887 million from 42.151 million shares worth RM6.507 million.
On a sectoral basis, consumer products accounted for 50.635 million shares traded on the Main Board, industrial products 303.357 million, construction 145.296 million, trade/services 472.862 million, technology 14.219 million, infrastructure 24.103 million, finance 92.461 million, hotels 8.129 million, properties 251.448 million, plantations 32.093 million, mining 87,000, REITs 3.054 million and closed/fund 88,000.
Thursday, July 16, 2009
Asia Stocks-Rise on recovery hopes, Malaysia hits 11-mth high
Sources: Reuters (Kazunori Takada) Wed Jul 15, 2009 6:17am EDT
* Positive outlook, upbeat U.S. earnings boost markets * Malaysia at 11-month highs, S'pore a near 5-wk high * Cenbank comment pushes Thai market to 2-week high By Arada Therdthammakun BANGKOK, July 15 (Reuters) - Southeast Asian stock markets
edged higher on Wednesday as solid earnings from U.S. firms and
an improving Asian economic outlook boosted confidence in a
global recovery, sending Singapore and Malaysian shares to
fresh highs. Singapore's benchmark index .FTSTI rose 3.4 percent, with
a blue chip shares rally taking it to a near five-week high and
on buying in the last minutes of trading after a Reuters poll
showed the country will see a sharp turnaround next year as the
continent rebounds. [nSP519874] Malaysian stocks .KLSE edged 1.63 percent higher, having
hit their highest level unseen since Aug. 15, 2008 earlier in
the day, Philippine stocks .PSI closed up 0.95 percent at its
highest since June 15, with Philippine Long Distance Telephone
(TEL.PS) leading the way with a 0.42 percent rise. Thai shares .SETI closed up 1.75 percent at a two-week
high, extending a 0.53 percent rise in morning trade, after the
Bank of Thailand said it could still cut rates again if economy
slows. [nBKT001040] "As the BOT has decided to hold rates unchanged for the
second consecutive MPC meeting, this development should support
our views that Thai policy rates have reached the bottom
although the MPC's latest statement remains accommodative."
Usara Wilaipich, economist at Standard Chartered Bank said. The central bank said it was ready to cut rates if economic
growth slows and saw no immediate rate rise prospect. "The committee would continue to closely monitor
developments in domestic and external economic conditions and
would stand ready to implement appropriate monetary policy to
ensure an orderly economic recovery," it said in a statement. Elsewhere in the region, late buyings helped push
Indonesian shares .JKSE up 3.24 percent to their highest
since September 2008, while Vietnam stock index .VNI
rebounded 2.03 percent after falling to a six-week low a day
earlier. However analysts saw the sharp rise to be temporary, with
investors now looking for sings of a pick up in U.S. demand,
which is key to a solid global recovery, and quarterly results
from companies in the region. "The market gain might not last long, we are still cautious
on second-quarter earnings from firms whether they will have
any surprise to the markets," said Pichai Lertsupongkij, head
of sales at Thanachart Securities in Bangkok. The MSCI index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 2.8 percent by 0922, while U.S. stock
futures DJc1 edged up 0.79 percent. Financial stocks .FTFSTAS8000 were among the top
percentage gainers in Singapore's blue chip index for the
second day in a row, rising 4.24 percent to a four-week high,
after Goldman Sachs' quarterly earnings trounced forecasts and
raised investor confidence in financials. DBS, Southeast Asia's largest lender, edged up 3.6 percent.
Oversea-Chinese Banking Corp (OCBC.SI) climbed 2.5 percent and
United Overseas Bank (UOBH.SI) surged nearly 6.0 percent. In Bangkok, index heavyweight energy firm PTT Exploration
and Production PTTE.BK rose 0.8 percent, top conglomerate
Siam Cement SCC.BK gained 3.5 percent, while shipper Thoresen
Thai TTA.BK increased 5.24 percent. Gains in heavyweight pushed up shares in Kuala Lumpur, with
energy services firm KNM Group (KNMP.KL) jumping 11 percent,
the nation's top lender Maybank (MBBM.KL) climbing 4.4 percent
and top listed company Sime Darby (SIME.KL) up 2.08 percent.
($1=34.10 Baht)
* Positive outlook, upbeat U.S. earnings boost markets * Malaysia at 11-month highs, S'pore a near 5-wk high * Cenbank comment pushes Thai market to 2-week high By Arada Therdthammakun BANGKOK, July 15 (Reuters) - Southeast Asian stock markets
edged higher on Wednesday as solid earnings from U.S. firms and
an improving Asian economic outlook boosted confidence in a
global recovery, sending Singapore and Malaysian shares to
fresh highs. Singapore's benchmark index .FTSTI rose 3.4 percent, with
a blue chip shares rally taking it to a near five-week high and
on buying in the last minutes of trading after a Reuters poll
showed the country will see a sharp turnaround next year as the
continent rebounds. [nSP519874] Malaysian stocks .KLSE edged 1.63 percent higher, having
hit their highest level unseen since Aug. 15, 2008 earlier in
the day, Philippine stocks .PSI closed up 0.95 percent at its
highest since June 15, with Philippine Long Distance Telephone
(TEL.PS) leading the way with a 0.42 percent rise. Thai shares .SETI closed up 1.75 percent at a two-week
high, extending a 0.53 percent rise in morning trade, after the
Bank of Thailand said it could still cut rates again if economy
slows. [nBKT001040] "As the BOT has decided to hold rates unchanged for the
second consecutive MPC meeting, this development should support
our views that Thai policy rates have reached the bottom
although the MPC's latest statement remains accommodative."
Usara Wilaipich, economist at Standard Chartered Bank said. The central bank said it was ready to cut rates if economic
growth slows and saw no immediate rate rise prospect. "The committee would continue to closely monitor
developments in domestic and external economic conditions and
would stand ready to implement appropriate monetary policy to
ensure an orderly economic recovery," it said in a statement. Elsewhere in the region, late buyings helped push
Indonesian shares .JKSE up 3.24 percent to their highest
since September 2008, while Vietnam stock index .VNI
rebounded 2.03 percent after falling to a six-week low a day
earlier. However analysts saw the sharp rise to be temporary, with
investors now looking for sings of a pick up in U.S. demand,
which is key to a solid global recovery, and quarterly results
from companies in the region. "The market gain might not last long, we are still cautious
on second-quarter earnings from firms whether they will have
any surprise to the markets," said Pichai Lertsupongkij, head
of sales at Thanachart Securities in Bangkok. The MSCI index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 2.8 percent by 0922, while U.S. stock
futures DJc1 edged up 0.79 percent. Financial stocks .FTFSTAS8000 were among the top
percentage gainers in Singapore's blue chip index for the
second day in a row, rising 4.24 percent to a four-week high,
after Goldman Sachs' quarterly earnings trounced forecasts and
raised investor confidence in financials. DBS, Southeast Asia's largest lender, edged up 3.6 percent.
Oversea-Chinese Banking Corp (OCBC.SI) climbed 2.5 percent and
United Overseas Bank (UOBH.SI) surged nearly 6.0 percent. In Bangkok, index heavyweight energy firm PTT Exploration
and Production PTTE.BK rose 0.8 percent, top conglomerate
Siam Cement SCC.BK gained 3.5 percent, while shipper Thoresen
Thai TTA.BK increased 5.24 percent. Gains in heavyweight pushed up shares in Kuala Lumpur, with
energy services firm KNM Group (KNMP.KL) jumping 11 percent,
the nation's top lender Maybank (MBBM.KL) climbing 4.4 percent
and top listed company Sime Darby (SIME.KL) up 2.08 percent.
($1=34.10 Baht)
Wednesday, July 15, 2009
Consumer confidence in Malaysia increases
Sources: By YVONNE TAN (The Star Online) 15th July 2009
PETALING JAYA: Consumer confidence in Malaysia improved in the second quarter of the year compared with the first quarter as individuals began to feel “less negative” about the current state of the economy and more optimistic about its future, according to a recent study.
The local Consumer Confidence Index was up from 83 to 94 alongside increases in the indexes of other Asian countries, namely Singapore, China, Thailand and Indonesia, according to independent market research agency InsightAsia Research group’s latest survey.
“Consumers are substantially more positive in the second quarter than they were in the first,” it said in its latest report on Asian Consumer Confidence.
Even though economic growth was expected to remain negative this year, emergency economic policy measures and recovering equity markets had lent support to confidence, it noted.
The survey covered 2,300 people from urban areas that were asked their assessment of the current economic situation and expectations for the next 12 months. The level 100 is the neutral point in the index, where an index higher than 100 indicates a high confidence level (optimistic) and an index below 100 indicated a low level of confidence (pessimistic).
Of the five countries, Singapore registered the strongest growth, adding 26 points to 88 while Indonesia and Malaysia increased more than 10 points each and were now just below the neutral point, at 97 and 94 respectively, the survey revealed.
Singapore yesterday said its economy rebounded strongly by 20.4% quarter-on-quarter in the second quarter versus the market’s expectation of 13.4%, helped by recovery in its construction and manufacturing sectors.
The Singapore government has raised its 2009 forecast to between -4% and -6% year-on-year, up from a previous forecast of -6% and -9%.
In Malaysia, improvements in the local economy were expected in the second half and should extend into 2010 as the effects of the implementation of the various stimulus packages were felt.
Professor of economics and head of department at the London School of Economics Danny Quah does not think that the renewed confidence is unfounded.
“The severe fall-off in the first place was, in my view, an unwarranted over-reaction in any case,” he told StarBiz via e-mail yesterday.
Quah said the 1997 Asian financial crisis had previously already “cleaned out” a lot of financial weaknesses in the region and while exports to the rest of the world remained important for the region generally, the fundamentals on the supply side had been strong and domestic demand had continued to be supported by both high productivity and healthy balance sheets.
“However, caution and vigilance on the part of policy-makers will always be needed,” he added.
Asian economies needed to be more “profoundly aware” that the world’s centre of gravity had shifted eastwards sharply, and that whatever anaemic growth the West might offer in the next few months, strong performance from China would provide significant growth opportunity for the rest of Asia, he said.
PETALING JAYA: Consumer confidence in Malaysia improved in the second quarter of the year compared with the first quarter as individuals began to feel “less negative” about the current state of the economy and more optimistic about its future, according to a recent study.
The local Consumer Confidence Index was up from 83 to 94 alongside increases in the indexes of other Asian countries, namely Singapore, China, Thailand and Indonesia, according to independent market research agency InsightAsia Research group’s latest survey.
“Consumers are substantially more positive in the second quarter than they were in the first,” it said in its latest report on Asian Consumer Confidence.
Even though economic growth was expected to remain negative this year, emergency economic policy measures and recovering equity markets had lent support to confidence, it noted.
The survey covered 2,300 people from urban areas that were asked their assessment of the current economic situation and expectations for the next 12 months. The level 100 is the neutral point in the index, where an index higher than 100 indicates a high confidence level (optimistic) and an index below 100 indicated a low level of confidence (pessimistic).
Of the five countries, Singapore registered the strongest growth, adding 26 points to 88 while Indonesia and Malaysia increased more than 10 points each and were now just below the neutral point, at 97 and 94 respectively, the survey revealed.
Singapore yesterday said its economy rebounded strongly by 20.4% quarter-on-quarter in the second quarter versus the market’s expectation of 13.4%, helped by recovery in its construction and manufacturing sectors.
The Singapore government has raised its 2009 forecast to between -4% and -6% year-on-year, up from a previous forecast of -6% and -9%.
In Malaysia, improvements in the local economy were expected in the second half and should extend into 2010 as the effects of the implementation of the various stimulus packages were felt.
Professor of economics and head of department at the London School of Economics Danny Quah does not think that the renewed confidence is unfounded.
“The severe fall-off in the first place was, in my view, an unwarranted over-reaction in any case,” he told StarBiz via e-mail yesterday.
Quah said the 1997 Asian financial crisis had previously already “cleaned out” a lot of financial weaknesses in the region and while exports to the rest of the world remained important for the region generally, the fundamentals on the supply side had been strong and domestic demand had continued to be supported by both high productivity and healthy balance sheets.
“However, caution and vigilance on the part of policy-makers will always be needed,” he added.
Asian economies needed to be more “profoundly aware” that the world’s centre of gravity had shifted eastwards sharply, and that whatever anaemic growth the West might offer in the next few months, strong performance from China would provide significant growth opportunity for the rest of Asia, he said.
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