Friday, March 16, 2012

20120316 1014 Local & Global Market Related News.

Economy: RM113bn private investment target this year attainable, says Mustapa
International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the target of  RM113bn private investment for 2012 was attainable based on the new projects approved  under the Entry Point Projects (EPPs) and the good progress made so far under the Economic  Transformation Programme (ETP). He said last  year, private investments totaled RM94bn adding that under the 10th Malaysia Plan, the target for private investments is RM115bn a  year. Meanwhile, Minister in the Prime Minister's Department Datuk Seri Idris Jala said none  of the investors had indicated that they would be cancelling their projects based on what  was happening at the global stage. He said as the economy is largely domestic demanddriven, it is less exposed to the vagaries of the global economy. (Bernama)

The world shortage of natural rubber will deepen this year as the economy improves in China and India, the biggest buyers, and car sales expand, according to the Association of Natural Rubber Producing Countries (ANRPC). “The trend is promising on signs of a strong recovery in demand,” said Jom Jacob, a senior economist. Demand may continue to outstrip supply next year as the global economy recovers, he said. The shortage may extend a 28% advance in Tokyo futures this year, potentially increasing costs for companies using rubber as a raw material. “Demand is going up as car sales increase,” said Masayo Kondo, president of Commodity Intelligence Ltd. in Tokyo. Prices may climb by 19% to ¥400/kg (US$4,761/mt) in the next two months, he said. The deficit may more than triple to 186k mt this year from a previous estimate of 51k mt as China and India shift their policy from fighting inflation to boosting growth, and the economies in the U.S. and Japan improve, Jacob said. Supplies exceeded demand by 153k mt last year, he added. (Bloomberg, ANRPC)

Stocks Advance on Economic Data; Treasuries Trim Decline (Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index above 1,400 for the first time since 2008, as reports on manufacturing and jobless claims bolstered optimism in the economy. Treasuries trimmed losses. The S&P 500 climbed 0.6 percent to close at 1,402.6 at 4 p.m. in New York and the Dow Jones Industrial Average  gained 58.66 points to 13,252.76, its highest close since December 2007. The 10-year Treasury yield added one basis point to 2.28 percent after gaining as much as eight basis points. Crude pared losses as an Obama official denied a report the U.S. and U.K. planned to release oil from strategic reserves.

US producer prices rose 0.4% mom in Feb (0.1% in Jan), coming short of the consensus 0.5% growth, whilst core producer prices moderated to 0.2% mom from 0.4% in Jan, matching consensus expectations. (Bloomberg)

The US Empire State manufacturing survey’s general business conditions index rose to 20.21 in Mar (19.53 in Feb), surpassing expectations of a rise to 17.50. (Bloomberg)

Foreign demand for long-term US securities rose to US$101.0bn in Jan as opposed to a revised US$19.1bn previously. (Bloomberg)

Jobless Claims in U.S. Decrease, Matching Four-Year Low (Bloomberg)
Claims for jobless benefits dropped last week in the U.S., matching the lowest level in four years, more evidence the labor market is improving. Applications for unemployment insurance payments fell by 14,000 to 351,000 in the week ended March 10, Labor Department figures showed. Economists forecast 357,000, according to the median estimate in a Bloomberg News survey. Claims reached the same level a month ago, the lowest since March 2008.

Consumer Confidence in U.S. Rose Last Week to Four-Year High (Bloomberg)
Consumer confidence rose last week to the highest level in four years as job gains put more Americans in the mood to spend. The Bloomberg Consumer Comfort Index climbed to minus 33.7 in the period to March 11, the strongest since March 2008, from minus 36.7 the previous week. A buying-climate gauge reached the highest level since November 2007, and a measure of the state of the economy had its best showing since September 2008.

China Adds Treasuries For First Time Since July on Europe Woes (Bloomberg)
China, the largest foreign U.S. creditor, increased its holdings of U.S. government securities in January for the first time in six months as European leaders struggled to contain the region’s sovereign-debt crisis. Holdings rose by 0.7 percent to $1.16 trillion, the first growth in China’s stake since July, Treasury data released yesterday show. The report also showed that net foreign purchases of Treasuries totaled almost $83 billion in January, compared with net selling of $14.9 billion the month before.

FDI in China fell in Feb by 0.9% yoy to US$7.73bn (US$10bn in Jan), the fourth successive month of decline on account of weak Western sentiment. In the first two months of the year alone, inward investment fell 0.56% yoy to US$17.72bn. (AFP)

China is relaxing enforcement of its loan-to-deposit ratios (LDR) for banks after two straight months of flagging loan growth, the local media reported, adding that the China Banking Regulatory Commission has raised the target LDR for two major state banks to spur lending. (Reuters)

China will not slacken its efforts in regulating housing prices, since they are still far from falling back to a reasonable level, Premier Wen Jiabao said. (People's Daily)

New home sales in Singapore surged to 2,413 units in Feb, well up from the about 1,800 units sold in Jan. (ST)

Singapore’s retail sales grew 1.7% mom in Jan, surprising analysts’ expectations of a decline of 1.5% mom. (ST)

Wages in Singapore went up by 6% in 2011 but struggled to keep pace with inflation, which reached 5.5% in Dec 2011. Real wages inched up by 0.7% in 2011, less than the 2.7% rise in 2010. Productivity grew by just 1% last year, down from 11% in 2010. Job creation rose to 37,600 in 4Q11 compared to 31,900 in 3Q11. However layoffs also increased to 3,250 workers in 4Q11, higher than the 1,960 in 3Q11. (ST)

Foreign investors bought Japanese stocks to the tune of ¥87.0bn last week (a revised ¥164.4bn in the prior week), the 11th straight week of net buying. Foreign purchases of bonds and bills also rose ¥240.5bn and ¥1.1bn respectively (revised ¥359.4bn and -¥69.2bn in the prior week). (Reuters)

European car registrations in Feb fell 9.2% yoy to 923,381m vehicles (-7.1% in Jan), the fifth consecutive monthly decline and steepest since a 16% fall in Oct 2010. (Bloomberg)

Eurozone employment fell 0.2% qoq in 4Q11 (-0.1% in 3Q11), whilst hourly labour costs rose 2.8% yoy in 4Q11 (2.7% in 3Q11), with a 3.3% rise in industry, according to Eurostat. (Reuters)

Wages in the euro zone rose 2.5% yoy in 4Q11, marginally stronger than the 2.4% increase in 3Q11. An inflation rate of 2.9% in 2011 indicates real wages fell over the period and likely weighed on consumers' ability and appetite to spend. (WSJ)

The IMF approved a €28bn loan for Greece as part of a second bailout led by euro-area governments that require more austerity and an overhaul of its economy, with €1.65bn to be made immediately available. The IMF also expects Greece to exit recession only by 2014. (Bloomberg)

India's central bank kept its repurchase rate steady at 8.50% and left the cash reserve ratio (CRR) unchanged at 4.75%, after it unexpectedly cut the CRR by 0.75% pt on 9 Mar. (WSJ)

India's economy is expected to grow 7.6% next fiscal year, from a 6.9% expansion expected this year ending 31 Mar, a government survey showed. The survey also projected India will miss its budget deficit target of 4.6% of GDP for the current fiscal year. (WSJ)

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