Monday, May 7, 2012

20120507 1140 Global Economy Related News.

The biomass sector in Malaysia is expected to attract two potential major foreign direct investments (FDI) worth about RM3.5bn in the near future. The Technical Advisor to The EU-Malaysia Biomass Sustainable Production Initiative (Biomass-SP), Datuk Leong Kin Mun said an investment of US$300m (RM913.4m), is expected to come from a US-based company, Genomatica, to establish a biosugar plant. He added that a Chinese company, Wuhan Kaidi, is seeking to invest RM2.5bn in a 20-MW biomass power plant. There is no specific timeframe for the projects to start as there are many issues to be addressed before the deal is sealed and this includes the sustainability of feedstock supply, he said. (Bernama, Starbiz)

Kuantan has the potential to be developed as an industrial and tourism site, said PM Datuk Seri Najib Tun Razak. "I have directed the East Coast Economic Region to develop a waterfront project in Kuantan to attract more tourists," he said. (The Star)

Kuantan has been identified as the suitable location to house a sister industrial park between China and Malaysia, said PM Datuk Seri Mohd Najib Razak. The move was to reciprocate China's efforts to keep aside a 55 sq km land in Qinzhou, Nanning as the Qinzhou Industrial Park, a joint venture project between China and Malaysia. The government was carrying out detailed studies on the implementation of the project and have had meetings with investors from China towards that, he said. (Bernama)

Tanjung Bin Petrochemical and Maritime Centre (TBPMC), which will cost about RM2.4bn, is set to play a vital role in transforming south Johor into an oil and gas (O&G) hub, supported by other major developments in the area. Seaport Worldwide (SWW), a wholly-owned subsidiary of Johor Port, which in turn is wholly-owned by MMC Corp Bhd, is the master developer of the 2,255-acre project. Tanjung Bin’s anchor tenant, ATT Tanjung Bin Sdn Bhd (ATB), is already in operations and currently provides storage capacity of up to 841,000 sq m under its phase one development. ATB plans to provide an additional 400,000 sq m of storage space under phase two. The planned bridge across Sungai Pulai that will connect Port of Tanjung Pelepas (PTP) to Tanjung Bin will open up opportunities for more social and economic activities. SWW was also now in serious discussions with some international O&G players to further develop the area and provide additional storage capacity of 2m-3m sq m. (Starbiz)

Thailand’s foreign reserves for the week ended 27 Apr eased to US$178.5bn from US$178.7bn the previous week. The central bank’s holdings of forward contracts rose 3.5% to US$30.9bn last week, from US$29.8bn a week earlier (Bloomberg)


Thailand: Prasarn signals rate cut over as GDP forecast raised
Thailand will refrain from further interest-rate reductions as an economic recovery that is exceeding the central bank’s expectations prompts it to raise the 2012 growth forecast. Governor Prasarn Trairatvorakul said that Thailand will probably expand 6% this year, from a previous estimate of 5.7%, while inflation is still at a “manageable level.” The Bank of Thailand has kept its benchmark rate unchanged at its past two meetings at 3%, a level that Prasarn said is in an “accommodative zone” and will help strengthen the nation’s growth. (Bloomberg)

Philippines: Inflation accelerates from 30-month low on fuel, food
Philippine inflation accelerated in April from a 30-month low on higher utility, fuel and food costs, reducing scope for the central bank to resume interest-rate cuts. Consumer prices rose 3% y-o-y, after a 2.6% advance in March. The median estimate was for a 2.6% gain. Inflation pressure may rise further after the government approved a fare increase for jeepneys, a popular mode of transport, and President Aquino said that wage boards would speed up discussions on higher minimum pay. (Bloomberg)

Australia: Central bank cuts growth, inflation outlook on weak hiring
The Reserve Bank of Australia (RBA) cut growth and inflation forecasts as weak job and housing markets keep price gains in check. The RBA said that labor market conditions have continued to be on the soft side to date, with large increases in employment in mining and some service industries roughly offset by declines in the manufacturing, hospitality and retail sectors. The central bank sees average growth of 3% in 2012, down from its February estimate of 3.5%. Consumer prices should rise 2.5%, from a previous prediction of 3%. (Bloomberg)

EU: Manufacturing, services shrink more than estimated
Euro-region services and manufacturing output contracted more than initially estimated in April, adding to signs of a deepening economic slump. A euro-area composite index based on a survey of purchasing managers\ dropped to 46.7 from 49.1 in March. That’s the fastest rate of decline since October and below an estimate of 47.4 published on 23 April. A reading below 50 indicates contraction. A gauge of euro-region manufacturing fell to 45.9 in April from 47.7 in March, while a measure of services dropped to 46.9 from 49.2. (Bloomberg)

UK: Home prices drop the most in 1.5 years as recession bites
UK house prices dropped the most in 1.5 years in April as a stamp-duty exemption for first-time buyers ended and the economy fell into its first double-dip recession since the 1970s. Prices dropped 2.4% from March, the largest monthly decline since Sept 2010, to an average GDP159,883. Prices had risen 2.2% in March. April values were down 0.6% y-o-y. Demand for homes was boosted earlier this year as first-time buyers took advantage of a tax exemption on purchases of homes costing less than GBP250,000 before it ended in March. (Bloomberg)


Socialist Francois Hollande swept to victory in France's presidential election on Sunday in a swing to the left at the heart of Europe and promised to start a pushback against German-led austerity policies. Hollande led conservative incumbent Nicolas Sarkozy by 51.3% to 48.7% with 83% of votes counted, the Interior Ministry said. (Reuters)

Greek voters enraged by economic hardship caused by the terms of an international bailout turned on ruling parties in an election on Sunday, putting the country's future in the euro zone at risk and threatening to revive Europe's debt crisis. The latest official results, with over 61% of the vote counted, showed the only two major parties supporting an EU/IMF program that keeps Greece from bankruptcy would be hard pressed to form a lasting coalition. Conservative New Democracy and Socialist PASOK, who have dominated Greece for decades, were holding less than 35% of the vote. That would mean they might only scrape the 151-seat threshold needed for even the most fragile majority in parliament. (Reuters)


US: Job gains trailing forecasts, adding to concerns of US slowdown
American employers in April added the fewest number of jobs in six months and wages stagnated. The 115,000 increase in payrolls was less than the forecast of a 160,000 increase and followed a revised 154,000 gain in March that was larger than initially estimated. Unemployment fell to a three-year low of 8.1% as people left the labor force. The April increase in payrolls leaves the labor market 5m jobs short of the 8.8m lost as a result of the 18-month recession. Private payrolls during Obama’s term in office turned to positive from negative in April, with a net gain of 35,000. Overall payrolls remain lower than when Obama was inaugurated because there are 607,000 fewer government workers, including federal, state and local employees. Average hourly earnings were USD23.38 in April, little changed from the month before. (Bloomberg)

Global: Consumer confidence gains
Global consumer confidence rose in the first quarter as improvements in the US economy and continued growth in Asian markets brought sentiment levels to the highest level since the global recession began. Nielsen said its index of consumer confidence rose 5 pts in the period to 94. North America rose 8 pts to 92 while Europe is the most pessimistic region at 72 pts, though confidence increased in 16 out of 27 markets there. Asia-Pacific continues to be the most optimistic area at 103 pts. (Bloomberg)

US stock market slumps
US stocks slumped, sending the Standard & Poor’s 500 Index (S&P 500) to its biggest weekly retreat this year, as data on the American and European labor markets fueled concerns the global economy is weakening. The Dow Jones Industrial Average fell 168.32 pts, or 1.3% to 13,038.27, while the S&P 500 shed 22.47 pts, or 1.61% to 1369.10. (StarBiz)

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