Thursday, October 13, 2011

20111013 1009 Local & Global Economic Related News.

The government is considering disbursing in Jan 12 the RM500 one-off cash  aid to households earning RM3,000 and below a month, Deputy Finance  Minister Datuk Dr Awang Adek Hussin said yesterday. While there was no fixed  timeframe for the payment, the disbursement would be made in stages from Jan  onwards, he said.  The government had identified the probable agencies to be entrusted  with the payment, with the Inland Revenue Board (IRB) being the lead  agency. Other agencies listed are BNM, BSN and Pos Malaysia.  IRB was picked because they have the income tax returns files of active  and non-active taxpayers while it would also use the e-Kasih database to  obtain information of the people who are really eligible for the aid. IRB CEO Datuk Dr Mohd Shukor Mahfar said the eligibility income  level would be calculated based on the total monthly income per  household and not an individual's income. (Bernama)  

Construction of the Klang Valley MY Rapid Transit (KVMRT) is expected to  begin in 2Q12 or 3Q12, MRT Co CEO Datuk Azhar Abdul Hamid said yesterday.  Currently, some advanced work is being done for the project, he said.  (Bernama)

The Ministry of Housing and Local Government and the Ministry of Natural  Resources and Environment will amend the  Strata Title Act 1985 and the  Building and Common Property Act 2007 to protect the interests of strata  property owners.  Housing and Local Government Minister Datuk Chor Chee Heung said  the amendment to the existing housing act was to compel developers to  apply for building strata titles within six months after the sales and  purchase (S&P) agreement was signed.  The amendment also enables the strata title to be obtained by the house  purchaser together with all the purchase documents including the  certificate of fitness for occupation (CFO). (Bernama)

Bank Negara Malaysia yesterday unveiled a newly developed  financial  education website called "Islamicfinanceinfo" that will complement the  current "Bankinginfo" and "Insuranceinfo" websites. The website features  information distinctive to Islamic finance to facilitate consumer understanding  of Islamic finance, it said. (Bernama)

Malaysia has dropped one place to rank 78th on economic freedom in the  Economic Freedom of the World: 2011 Annual Report, in line with the  decline worldwide and mainly due to the size of the government. The report by  the Institute for Democracy and Economic Affairs (IDEAS) was launched  yesterday at the Economic Freedom Asia Conference 2011.  “Actually, Malaysia's ranking has been falling for several years and this  is a worrying trend," the chief executive of IDEAS, Wan Saiful Wan Jan  said. From 2006 up to 2011, Malaysia ranked 53rd, 60th, 72nd, 66th,  77th and 78th, respectively.  He pointed out that the country had scored zero under the sub-category  of "Government Enterprises and Investments". However, Malaysia did  well in the field of "Regulation of Credit, Labour and  Business" and it  had been improving in this area since 1980. (Bernama)

US mortgage applications increased 1.3% from one week earlier, according  to data from the Mortgage Bankers Association’s (MBA) survey for the week  ended 7 Oct. The Refinance Index increased 1.3% percent from the previous  week.  The seasonally adjusted Purchase Index increased 1.1% from one week  earlier. The average contract interest rate for 30-year fixed-rate mortgages  backed by the FHA  increased to 4.06% from 4.05%. (MBA)

US job openings fell in Aug for the first time in four months, signaling a  sustained labor market recovery will take time to unfold. The number of  positions waiting to be filled dropped by 157,000 to 3.06m in Aug (3.21m in Jul),  according to Labor Department figures issued. (Bloomberg)

US Treasury Secretary Timothy F. Geithner said European leaders must  go beyond a planned  recapitalization of banks to resolve the continent’s  sovereign- debt crisis. “The most important problem is they have to make sure  that the major economies of Europe that are under pressure now are able to  borrow at affordable rates,” Geithner said. (Bloomberg)

US: Fed tempted by QE3 at latest meeting
The US Federal Reserve considered a new round of quantitative easing as an option at its September monetary policy meeting, suggesting that QE3 is still possible if the economy weakens further. “A number of participants saw large-scale asset purchases as potentially a more potent tool that should be retained as an option in the event that further policy action to support a stronger economic recovery was warranted,” say minutes of the meeting. (Bloomberg)

The US manufacturing industry rebounded in Sep from its lowest level  since Dec 09, helping to defy concerns about a double-dip recession. The Credit  Managers’ Manufacturing Index rose last month to 53.3 in Sep (52.1 in Aug), as  its gauge of sales jumped to the highest since Apr, according to the National  Association of Credit Management’s monthly survey of 600 executives.  (Bloomberg)

The US Senate passed a bill aimed at punishing China for keeping the yuan undervalued, triggering a backlash from Chinese officials who warned the  measure risks damaging trade relations and undermining the global recovery.  (Bloomberg)

US President Barack Obama’s drive to enact a US$447bn  jobs plan was  derailed by the US Senate, falling short of the 60 votes needed to advance what  he has proposed to revive a faltering economy. (Bloomberg)

Eurozone industrial production unexpectedly rose during Aug, official  figures showed, easing concerns that the crisis-torn eurozone was heading back  into recession in 3Q. Eurostat said industrial output increased by 1.2% mom in  Aug (+1.1% in Jul). Economists called for a 0.8% decline. (AP)

European Commission President Jose Barroso called for a reinforcement  of crisis-hit banks, the payout of a sixth loan to Greece and a faster start for a  permanent rescue fund to master Europe’s debt woes. (Bloomberg)

Slovakia: Clears road to completing euro bailout fund approval
Slovakia will approve Europe’s enhanced bailout fund today or tomorrow, completing the ratification process across the 17 euro countries as the region’s leaders prepare for a summit this month. Party leaders in Bratislava yesterday secured backing for the European Financial Stability Facility in a second vote, Robert Fico, head of the largest opposition party Smer, said. Prime Minister Iveta Radicova’s SDKU party in exchange agreed to back early elections to be held on March next year. (Bloomberg)

EU: Merkel still confident of EFSF passage
German Chancellor Angela Merkel remains optimistic that eurozone countries will pass an expanded European bailout fund at an EU summit later this month and that a solution to Europe's debt crisis would need more than the EFSF. "I am very certain that by 23 Oct we will have all the signatures of all the member states on the EFSF bill," Merkel said. (Bloomberg)

Japan’s  machinery orders rebounded in Aug on demand for electrical  products, signaling that companies are willing to invest even as global economic  growth slows and the yen stays near post-World War II highs. Bookings rose  11% mom in Aug (-8.2% in Jul), the fastest increase in a year, the Cabinet Office  said. Economists projected an increase of 3.9%. (Bloomberg)

Japan’s bank loans increased in Sep for the first time in almost two years as  the country’s biggest earthquake and tsunami spurred lending for reconstruction. Lending by 119 local banks rose 0.1% yoy to ¥420tr (US$5.5tr)  as of 30 Sep, the Japanese Bankers Association said, the first yoy increase in 23  months. (Bloomberg)

Thai Prime Minister Yingluck Shinawatra urged food producers not to  raise  prices as flooding cuts production and residents rush to stock up on  staple goods. (Bloomberg)

India’s industrial production rose 4.1% yoy in Aug (+3.8% gain in Jul).  Manufacturing grew 4.5% yoy in Aug (+3.1% in Jul), mining fell 3.4%, while  electricity rose 9.5%. Economists expected a 4.7% yoy gain in overall industrial  output. (Bloomberg)

India’s inflation must ease before the central bank can reduce interest rates,  Governor Duvvuri Subbarao said, signaling policy makers may maintain a tight  monetary stance for now. (Bloomberg)

The  Philippines cut its economic-growth targets for 2011 to 4.5% to 5.5%,  from the previous 5% to 6% and for 2012 to 5% to 6%, from the previous 5.5% to  6.5%. Separately, President Benigno Aquino presented a stimulus package to  spend PP72bn (US$1.66bn) on certain infrastructure projects and  poverty-alleviation programs in 4Q11. (Wall Street Journal)

Indonesia will maintain 2012 subsidized-fuel prices at this year’s level,  Melchias Mekeng, head of the parliament’s budget committee, said. The volume  of subsidized fuel will be kept at 40m kiloliters, valued at Rp123.6tr  (US$13.8bn), as previously proposed.   (Bloomberg Business Week)

In a defiant response to US Senate approval of a bill that would pressure China to let its  currency rise faster, the nation's central bank set the guideposts for  the yuan substantially lower on Wednesday and warned that the bill could  imperil further currency reform. (Wall Street Journal)

China unveiled a set of measures to ease a  funding squeeze among small  businesses, including allowing them to issue more bonds, tapping other sources  of financing allowing small banks to continue to implement "relatively" low  reserve requirement ratios (RRR) compared with big banks. (Reuters)

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