Friday, April 20, 2012

20120420 0958 Global Economy Related News.

The total cumulative committed investment in the Sabah Development Corridor (SDC) has reached RM107bn as at the end of 1Q12, said Chief Minister Datuk Seri Musa Aman. The SDC and Greater Kota Kinabalu identified 31 Entry Point Projects (EPPs) with a target investment of RM77.5bn by the year 2020, he said. The EPPs are expected to generate RM35.5bn in incremental Gross National Income (GNI), and create about 144,000 new jobs. The implementation of EPPs is estimated to be able to drive Sabah's economic growth at an annual average of 9%. (Bernama)

The Philippines registered US$766m in net foreign direct investment inflows in Jan, the largest since May 2007. (Reuters)


Philippines: Halts interest-rate cuts as growth outlook gains
The Philippines kept interest rates unchanged, halting after two consecutive cuts as a recovery in exports lessened the need for policy makers to add stimulus to the economy. Bangko Sentral ng Pilipinas held the rate it pays lenders for overnight deposits at 4%, according to a statement yesterday. Asian central banks are juggling the need to boost economies hurt by Europe’s debt crisis and slowing Chinese growth with increasing pressure to contain inflation fanned by elevated oil prices. (Bloomberg)


The Thai Industries Sentiment Index for Mar rose from 100.9 in Feb to stand at 102.1, increasing for the fourth straight month, the Federation of Thai Industries said. Exports of completely built up vehicles totalled 89,815 units in the month, up 16.17% mom and 4.89% yoy. (Bangkok Post)

Home purchases by foreigners in Singapore plummeted 78% qoq in the first quarter as the effects of the 10% additional buyer's stamp duty hit hard. (ST)

India's merchandise exports rose 21% yoy to US$303.7bn, a tad higher than the targeted US$300bn, but imports rose faster at 32.1% to US$488.6bn, stretching the full-year trade gap to US$184.9bn from US$118.6bn in the previous year. (WSJ)

Japan’s 2011 fiscal-year deficit hit ¥4.410tr (+¥5.33tr in 2010), the worst figure on record on account of plunging car and electronics exports as well as soaring energy imports. The Mar trade deficit came in at ¥82.6bn (¥29.4bn in Feb), well below economists’ expectations for a deficit above ¥200bn. Merchandise trade exports rose 5.9% yoy (-2.7% in Feb), surpassing expectations of 0.2%, whilst imports notched up to 10.5% yoy (9.2% in Feb), more than expectations of 7.0%. (AFP, Bloomberg)


Japan: Fastest export growth in a year boosts outlook
Japan reported the fastest export growth in a year and a smaller-than-expected trade deficit, aiding prospects of a sustained recovery in the world’s third- biggest economy. Boosted by car exports to the US, outbound shipments rose 5.9% in March from a year earlier. Comparisons are distorted by the earthquake in March 2011. The results support the International Monetary Fund’s estimate earlier this week that Japan’s economy may expand as much as 2% this year, boosted by reconstruction spending. (Bloomberg)


China will “steadily” ease monetary policy and boost liquidity in the financial system via open-market operations, state media cited a central bank official as saying, in a bid to avoid a sharp economic slowdown. (AFP)

In a move to tighten the banking sector's risk prevention and control, China’s Ministry of Finance ordered financial enterprises to raise loan loss reserves to 1.5% of gross loans beginning in Jul, up from the existing 1%. (Xinhua)

Profits at China's state-owned enterprises fell 9.1% yoy in the first quarter, with steel and building materials industries posting drastic drops, amid an economic slowdown. (Shanghai Daily)


India: Trade deficit surged to record last year, pressuring rupee
India’s trade deficit widened 56% in the fiscal year through March to a record USD184.9bn, adding pressure on the rupee, government data showed. Merchandise shipments climbed 21 percent to USD303.7bn in the 12-month period, Rahul Khullar, the top bureaucrat in the commerce ministry said yesterday. Imports advanced 32.1% to USD488.6bn. The trade gap in 2010- 2011 was USD118.7bn. The shortfall in India’s current account, the broadest measure of trade, was USD19.6bn in the three months through December, prompting the central bank to say it’s unsustainable. (Bloomberg)

Global: Lagarde Gets USD320bn to boost IMF coffers, expects more
International Monetary Fund Managing Director Christine Lagarde said she expects more contributions after landing pledges of about USD320bn in her campaign for bigger reserves to combat threats to global growth.“I look at this pot of money as an umbrella,” Lagarde said on Bloomberg Television yesterday. “There are clouds on the horizon.” Japan, Denmark and Switzerland are among the countries to rally this week to Lagarde’s call for a bigger lending capacity beyond the current USD380bn to shield the world economy against any deepening of Europe’s debt turmoil. (Bloomberg)

EU: Italian, Spanish bonds fall on concern debt crisis Is worse
Italian and Spanish bonds led declines among Europe’s higher-yielding government securities amid concern the regional debt crisis is worsening. Italy’s 10-year yields climbed for a second day after a government report showed industrial orders fell more than economists forecast and the Finance Ministry said debt-servicing costs will increase. French bonds dropped after Citigroup Inc. said it expects the nation’s credit rating to be cut over the next two to three years. German bunds advanced as investors sought the safest assets. Spain and France both raised the amounts they targeted at debt auctions today. (Bloomberg)

Eurozone consumer confidence fell to -19.8 in Apr (-19.1 in Mar). Economists had expected an improvement to -19.0. (Dow Jones)

US: Jobless claims signal growth may moderate
More Americans than forecast filed claims for jobless benefits and sales of previously owned homes unexpectedly dropped, indicating the almost three-year-old economic expansion may be moderating. Jobless claims fell by 2,000 to 386,000 in the week ended 14 April from a revised 388,000 the prior period, Labor Department figures showed yesterday in Washington. (Bloomberg)

US: Consumer confidence rises to match four-year high
Household confidence improved last week to match the highest level in four years as more Americans said their finances were in better shape. The Bloomberg Consumer Comfort Index was minus 31.4 in the period ended 15 April, compared with minus 32.8 over the previous seven days. The reading equaled that from two weeks earlier as the best since March 2008. Nonetheless, the monthly expectations measure fell from a one-year high, showing concern remains that too many Americans are still unemployed. (Bloomberg)

US: Previously owned home sales unexpectedly fell in March
Sales of previously owned US homes in March unexpectedly fell for the third time in the last four months, showing an uneven recovery in the housing market. Purchases dropped 2.6% to a 4.48m annual rate from 4.6m in February, the National Association of Realtors reported yesterday. Residential real estate remains the economy’s soft spot, challenged by stricter lending standards, lower home values and the threat of more foreclosures. An improved labor market and mortgage rates near historic lows have yet to stoke bigger gains in demand. (Bloomberg)

US Conference Board’s index of leading indicators rose 0.3% mom in Mar (0.7% in Feb), slightly above consensus of 0.2% on the back of the Fed’s zero-rate policy and the spread between short and long rates. (Bloomberg)

US existing-home sales rose 5.2% yoy in Mar (a revised 9.0% in Feb), whilst on a mom basis, the measure fell 2.6% (a revised -0.6% in Feb) to 4.48m units from a revised 4.6m units earlier. (Bloomberg)


US: Fed confirms banks must conform to Volcker by July 2014
The Federal Reserve and 4 other US agencies said Wall Street banks will have two years to implement the so-called Volcker rule so long as they make a good faith effort to comply with the ban on proprietary trading. The regulators added that the Fed has the authority to extend the period of compliance beyond July 21, 2014. The regulators also said that during the conformance period of two years, banking entities should engage in good-faith planning efforts, appropriate for their activities and investments, to enable them to conform. The rule, named for its original champion, former Fed Chairman Paul Volcker, attempts to reduce the chances that banks will make risky investments with their own capital and put depositors’ money at risk. (Bloomberg)

US: Index of leading economic indicators climbed 0.3%
The index of US leading indicators rose for a sixth month in Mar, indicating the world’s largest economy will maintain its expansion. The Conference Board’s gauge of the outlook for the next three to six months climbed 0.3% after a 0.7% gain in Feb that was the biggest in 11 months. The median forecast of economists surveyed by Bloomberg News called for a rise of 0.2% in March. An improving job market is helping Americans overcome higher fuel expenses and boosting the spending that accounts for about 70% of the economy. Strengthening consumer demand will help sustain the more than two-year expansion and make the economy more resilient to a slowdown in Europe. (Bloomberg)

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