20110825 1048 Local & Global Market Related News.

Total approved investments rose 120% yoy to RM16.4bn in 2Q11 (RM12.2bn in 1Q11).  In 1H11, the total approvals amounted to RM28.6bn (RM13.2bn in 1H10). (Mida)

PM Datuk Seri Najib Tun Razak yesterday launched the RM1.4bn  1Malaysia People's  Welfare Programme or KAR1SMA to assist about 500,000 recipients of welfare aid. The  aid would be given monthly under the programme to people in the target group comprising  senior citizens, disabled persons, single mothers and widows of soldiers and policemen.  The recipients would each receive between RM100 and RM450 per month.
• The allocation covered aid for children (RM290m), the disabled (RM332m) and senior  citizens (RM455m) and funding of social programmes at the community level (RM303m).
• A new category has been introduced under the programme for aid to eligible widows of  soldiers and policemen, involving a sum of RM4.1m. (Bernama, The Star)  

The newly-appointed CEO of Malaysia External Trade Development Corp (Matrade),  Dr Wong Lai Sum, said her immediate priority was to ensure export growth for the country.  Wong assumed the position on 20 Aug 2011, replacing Datuk Noharuddin Nordin, who has  been appointed director-general of Malaysian Industrial Development Authority.  
• Wong said Matrade was trying to achieve the 10th Malaysia Plan's target of 10.6%  export growth. The first half of the year saw an export growth of 8.3%. Her strategy for  the year will emphasise on fast-growing markets such as China, India and South Korea.  (Bernama, Financial Daily)    

Sarawak has set aside 4,300 hectares of land in Sri Aman to be transformed into the  country's  main rice bowl  with production expected to start in 2016. State Deputy Chief  Minister Tan Sri Alfred Jabu  said areas identified in Sri Aman were Batang Lupar,  Bijat  Stumbin and Banting Lingga. "The project has been approved by the federal government  and it is part of the government's strategy to eradicate poverty in the areas," he said.  
• To kick start the project, a pioneer paddy plantation project was already underway on a  50-hectare site in Stumbin, undertaken by Padiberas Nasional Bhd (Bernas).  
• Limbang, located in the northern part of the state, had also been identified as a potential  area for mass paddy plantation and production, he added. (Bernama)  

A sweeping  U.S. budget  deal has brightened the country's fiscal outlook but its gains  could evaporate if Congress extends tax breaks in coming years, nonpartisan  congressional forecasters said. Rock-bottom interest rates also will help slash projected  budget deficits nearly in half over the next 10 years, the  Congressional Budget Office said, and public debt will shrink to 61% of the economy over that time period -- roughly the  level that economists consider sustainable. The good news came with plenty of caveats.
• Unemployment will hover well above 8% and economic  growth will remain anemic  through the 2012 elections as the country struggles to recover from the deepest  recession since the 1930s, CBO said.
• Budget deficits will remain high by historical standards as the population ages and  healthcare costs continue to rise, the agency said.
• And the US$3.3tr in new budget savings could disappear entirely if Congress opts to  extend a range of tax breaks and other temporary fixes, such as higher payments to  doctors and hospitals, that are due to expire at the end of 2012. (Reuters)  

U.S. mortgage applications last week fell a seasonally adjusted 2.4% in the week ended  19 Aug (4.10% in the prior week), the Mortgage Bankers Association said, as market  volatility and economic uncertainty discouraged those in the market for a home.  Purchasing declined 5.7%, according to the MBA's weekly survey. Refinance activity was  down 1.7%. Rates on 30-year fixed-rate mortgages averaged 4.39%, up from 4.32%.  (WSJ, Bloomberg)  

U.S. durable goods orders climbed more than forecast in Jul as a surge in demand for  aircraft and autos eclipsed a decrease in business  equipment, including computers and  machinery. Bookings for goods meant to last at least three years rose 4% in Jul (-1.3% in  Jun), the most in four months, a Commerce Department report showed. Economists called  for a 2% gain. (Bloomberg)  

U.S. durable goods orders excluding the volatile transportation category,  unexpectedly advanced 0.7% in Jul (+0.6% in Jun). Economists expected a reading of - 0.6% in Jul. (U.S. Census Bureau, Bloomberg)  

U.S. orders for non-defense capital goods excluding aircraft, a proxy for future  business investment, dropped 1.5% in Jul (+0.6% in  Jun), the most in six months.  (Bloomberg)  

U.S. shipments of non-defense capital goods excluding aircraft, used in calculating  gross domestic product, increased 0.2% in Jul (+1.9% in Jun). (Bloomberg)  

U.S. home prices fell 5.9% yoy in 2Q (-5.6% in 1Q), the biggest decline since 2009, as  foreclosures added to the inventory of properties for sale. On a qoq basis, prices dropped  0.6% (-2.6% in 1Q), the Federal Housing Finance Agency said. (U.S. Federal Housing  Finance Agency, Bloomberg)  

Eurozone industrial orders slipped 0.7% mom in Jun (+3.6% in May), the Eurostat said.  Economists had forecast a gain of 0.4%. On a yoy basis, orders rose 11.1%. (Bloomberg)  

Thailand raised interest rates for the seventh meeting as the government’s plans to boost  wages and rice prices heighten inflation risks, even as the central bank signaled it may be  nearing the end of monetary tightening. The Bank of  Thailand increased its benchmark  one-day bond repurchase rate by 0.25%pt to 3.5%, it said. The move was predicted by  economists. (Bloomberg)  

Japan unveiled a US$100bn effort to help companies cope with a surging yen, signaling  that officials may be resigned to the currency remaining high. The government will release  foreign-exchange reserves to the state-run Japan Bank for International Cooperation for  funding to aid exporters and spur purchases overseas,  Finance Minister Yoshihiko Noda  said. The announcement came hours after Moody’s Investors Service lowered the nation’s  debt rating one step to Aa3, with a stable outlook. (Bloomberg)