Thursday, October 20, 2011

20111020 1029 Local & Global Economic Related News.

The government will review the household income limit eligibility for the  My First Home Scheme, Deputy Finance Minister Datuk Donald Lim Siang  Chai said. The review is in line with the announcement in the 2012 Budget,  which raised the loan limit under the scheme to RM400,000 from RM220,000.  "The eligibility limit is now RM3,500 and we are looking at around  RM6,000 to RM7,000," he said.  The discussions on the matter are still ongoing and the ministry is  waiting for feedback from banks regarding the proposal, he added.  (Bernama)

The government is looking at raising the income limit eligibility for the  My  First Home Scheme with the details of the review expected to be announced  next week. Deputy Finance Minister Datuk Donald Lim said the ministry was  awaiting feedback from designated banks. "The eligibility limit is now  RM3,5000 and we are looking at around the region of RM6,000 to RM7,000,"  he said. Lim said the review was in line with the announcement by PM Datuk  Seri Najib Razak in the 2012 Budget, which raised the loan limit under the  scheme from RM200,000 to RM400,000." (NST)

Malaysia has secured  infrastructure projects worth a whopping RM10bn  in Bangladesh to be implemented beginning early next year over a period of  between two and five years, said Malaysia's Special Envoy, Datuk Seri S.Samy  Vellu. Kuala Lumpur and Bangladesh inked a Memorandum of Understanding  (MOU) to facilitate the implementation of the projects on 18 Oct.  The first project involving the construction of 161 blocks of 16-storey  apartments, worth almost RM3bn, in Uttara near Dhaka would  commence early next year.  Another project that would take off next year would be the 10.8km  four-lane Poltan-Mawa Road flyover project worth RM1bn.  Samy Vellu said other projects include the construction of affordable  housing for squatters and a new satellite township on a 400 hectare  land at Kamrangichar and another similar development in  Mohammadpur. (Bernama)

Malaysia is on track to achieve the target of 4.7% growth in  labour  productivity this year, said International Trade and Industry Deputy Minister  Datuk Mukhriz Mahathir. The productivity level or output per employee last  year at US$13,577 (RM42,089) was 3.3 times higher than China's and 4.7 times  higher than Indonesia's. (Bernama)

The shared services and outsourcing (SSO) sector is expected to grow at  about 25% p.a. until 2020, Human Resources Minister Datuk Seri Dr. S.  Subramaniam said. Last year, the size of the sector was RM3.8bn and currently  almost 140 foreign and 60 local companies perform various SSO activities in  Malaysia, ranging from information technology (IT), business process and  knowledge process outsourcing.  The availability of skilled workers, competitive cost and an ideal  business environment were some of the attractive ingredients for the  foreign companies to pick Malaysia as their SSO location, he said.  (Bernama)

The last leg of the multi-billion ringgit double-tracking and electrification  rail project from Gemas to Johor Baharu is expected to be completed in 2016,  said Transport Minister Datuk Seri Kong Cho Ha. Work on the Gemas-JB  portion was expected to take off next year with tenders to be called soon as the  design of the project was almost completed.  "The completion of the final package will also complete the link with  Thailand in the north and Singapore in the south," he noted.  On the other hand, the route between Ipoh-Padang Besar would be  completed by end-2013 and the Seremban-Gemas line by next year.  (Bernama)

Malaysia will embark on a digital transformation programme,  Digital  Malaysia, which will rank as one of the key components in the country’s  transformation policy. PM Datuk Seri Najib Tun Razak said with the target set  for Digital Malaysia to contribute RM75bn to the GNI by 2020, together with  the RM93bn to be generated from information, communication and technology  initiatives as well as the estimated RM126bn to be extracted from ICT projects  under the GTP and ETP.  The contribution by ICT initiatives to the country’s GNI is targeted to  reach RM294bn by 2020. The government hoped to increase its ICT  contribution to the GNI, which is at 9.8%, to 17% by 2020. (NST)

Malaysia moved up five notches in the annual global ranking to become one of  the top five economies in Asia on the ease of doing business, according to  World Bank Doing Business Report for 2012. The report ranked  Malaysia as fifth in Asia after Singapore (1st) and Hong Kong (2nd). Overall, Malaysia was at the 18th position, ahead of Germany (19th), Japan (20th), Taiwan (25th), Switzerland (26th) and France (29th). (NST)

US mortgage applications decreased 14.9% from one week earlier, according  to data from the Mortgage Bankers Association’s (MBA) survey for the week  ended 14 Oct. The refinance index decreased 16.6% from the previous week. The  seasonally adjusted purchase index decreased 8.8% from one week earlier and is  at the lowest level in the survey since Dec 96. (MBA)

The US consumer price index increased 0.3% mom in Sep (+0.4% in Aug)  on a seasonally adjusted basis, the Bureau of Labor Statistics reported. On a yoy  basis, the all items index increased 3.9% (3.8% in Aug) before seasonal  adjustment. The readings matched economists’ expectations. (Bloomberg)

US housing starts climbed 15% to  an annual rate of 658,000 houses in Sep  (572,000 in Aug), the most since Apr 10, Commerce Department figures showed.  Economists called for a 590,000 pace.  (Bloomberg)

US privately-owned housing units authorized by  building permits fell 5.0%  mom to a seasonally adjusted rate of 594,000 in Sep (625,000 in Aug).  Economists expected the reading to fall by 3.9%. (Bloomberg)

US: Fed reports modest growth as firms voice doubt on recovery
The Federal Reserve said consumer spending rose slightly last month and the economy maintained its expansion, even as companies reported more doubt about the strength of the recovery. (Bloomberg)

US: Home starts jump, consumer prices stabilize
Builders began work on more US homes than forecast in September and consumer prices climbed at the slowest pace in three months, supporting Federal Reserve forecasts for a pickup in growth and a moderation in inflation. Housing starts jumped 15% to a 658,000 annual rate, the most since April 2010 while the cost of living climbed 0.3% from August. (Bloomberg)

The eurozone’s current-account deficit narrowed to €5bn (US$6.88bn) in  Aug from €6.8bn in Jul. (WSJ) Eurozone construction grew 0.2% mom in Aug (+1.8% in Jul), the Eurostat  said. On a yoy basis, output increased 2.5%. (Bloomberg)

South Korea and  Japan announced they will increase a  currency-swap accord to US$70bn (from $13bn) amid uncertainty over Europe’s fiscal woes  and the global economy. The measures include a one-year, US$30bn dollar  swap line and a won-yen agreement of the same amount, according to a  statement released by the Bank of Korea and Finance Ministry. (Bloomberg)

Bank of Thailand kept interest rates unchanged at 3.5% for the first time  this year, ending its longest series of increases since 2006, amid a weakening  global growth outlook and worsening floods. The decision came in line with  market expectations. (Bloomberg)

Foreign direct investment  (FDI) in  China gained 7.9% yoy in Sep to  US$9bn (+11.1% in Aug), the Ministry of Commerce said. FDI in 9M11 rose  16.6% yoy to US$86.7bn (+17.7% in 8M11). (Bloomberg)

Conference Board said that China’s leading index increased 0.5% mom to  159.5 in Aug, slower than a 0.6% rise in Jul. The coincident index gained 0.5%  mom in Aug to 207.1, following a 0.4% increase in Jul. (Conference Board)

About 600,000 workers are temporarily jobless after  floods swamped their  factories, Somkiat Chayasiwong, permanent secretary for the Labor Ministry,  said. It will take about 40 days for the 12bn cubic meters of water to drain into  the Gulf of  Thailand, Irrigation Department spokesman Boonsanong  Suchatpong said. (Bloomberg)

New vehicle sales in  Thailand rose 27.5% yoy in Sep to 87,012 units  (+20.3% in Aug). In 9M11, sales rose 20.6% yoy to 670,969 units. (Dow Jones)

The Philippines’ balance of payments (BOP) surplus in Sep fell 73.6%  mom to US$719m from US$2.72bn in Aug. The BOP was US$9.72bn in 9M11,  more than the Bangko Sentral ng Pilipinas' full-year surplus estimate of  US$6.7bn, and was supported by inflows from portfolio investments, exports  and remittances. Last year, the Philippines posted a record BOP surplus of  US$14.3bn. (Reuters)

Money supply in India grew 16.2% yoy in Oct. M3, which mainly comprises  currency in public circulation bank deposits and money invested in other saving  plans, stood at INR69.6tr (US$1.41tr) as on 7 Oct. India’s reserve money  outstanding rose 12.8% yoy, or INR1.6tr to INR13.8tr. (Bloomberg)

Finance Minister Pranab Mukherjee warned that  India’s economic growth for the year ending in March may undershoot the government’s earlier  projection of 9%. He also warned that it will be a “challenge” to meet the  government’s budget deficit target of 4.6% of GDP. India’s debt to GDP  ratio may reach 44.2% for the year ending in March, R. Gopalan, secretary in  the Department of Economic Affairs in the finance ministry, said. (Bloomberg)

China Banking Regulatory Commission Chairman Liu Mingkang said recent  stress test shows that  banks can take as much as 40% decline in property  prices. (Bloomberg)

Spain: Rating cut by Moody’s for third time since 2010
Spain’s credit rating was cut for the third time in 13 months by Moody’s as Europe’s debt crisis threatens to engulf the nation. Moody’s yesterday reduced its ranking to its fifth-highest investment grade, cutting it by two levels from Aa2 to A1, with the outlook remaining negative. (Bloomberg)

UK: Economy will fail to pick up in fourth quarter according to BoE
Bank of England (BoE) policymakers agree that Britain's stalled economy will fail to pick up in the current fourth quarter, according to minutes of their last meeting published on Wednesday. The forecast comes as the BoE minutes showed that members of the Monetary Policy Committee voted unanimously at the October meeting to pump GBP175bn into the British economy. The committee warned that "available indicators suggested that the underlying rate of growth... would be close to zero in the fourth quarter". (AFP)

Greece: Papandreou faces austerity vote as Athens braces for clashes
Greek Prime Minister George Papandreou is set to risk further social unrest over a new round of austerity measures that he needs to convince euro-area leaders that Greece will hold to its bailout program. The package comprises tax rises, cuts to pensions and wages and plans to dismiss 30,000 state workers, plus provisions to break the collective pay-bargaining power of Greek unions. (Bloomberg)

Brazil: Cuts rate to 11.5% on Europe crisis, slowing growth
Brazil’s central bank cut borrowing costs by half a point for a second straight meeting, as growth in Latin America’s biggest economy slows amid Europe’s sovereign debt crisis. The bank’s board voted unanimously to reduce the benchmark Selic rate to 11.5% from 12%. (Bloomberg)

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