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.
Monday, August 17, 2009
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.
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