Wednesday, June 27, 2012

20120627 1000 Local & Global Economy Related News.

The issuance of an Islamic mega bank licence in Malaysia is to increase the international dimension of Islamic Finance in the Malaysian financial system and thus enhance Malaysia’s global economic and financial interlinkages with other parts of the world. Entities applying for such licences are required to meet all the existing rules and regulations set forth by Bank Negara Malaysia. A full licence will only be awarded once all legal and regulatory requirements are met. Applications are market driven and private sector led. (Bank Negara Malaysia)

The controversial plan by regulator Bank Negara Malaysia (BNM) to set up an Islamic mega bank using public funds could involve the purchase of an existing lender, Asian Finance Bank (AFB), said industry sources. The AFB is one of three foreign Islamic banks in Malaysia. AFB was incorporated in Nov 2005 and is backed by a consortium of shareholders — Qatar Islamic Bank (66.67%), RUSD Investment Bank Inc (16.67%), Tadhamon International Islamic Bank (10%) and Financial Assets Bahrain W.L.L (6.67%). It is understood that KWAP agreed to fund a due diligence on the takeover of AFB to the tune of US$1bn. The central bank has declined comment on the matter. (Malaysian Insider)

The new Malaysian banknote series will be issued into circulation from 16 July. The central bank said following the initial announcement in May, it has been engaging over the last few months with relevant stakeholders to facilitate a smooth introduction of the new banknotes series. (Bank Negara Malaysia)

Malaysia is ranked the safest of 19 upper-middle income nations in the world, according to the World Justice Project's Rule of Law Index 2011 report. Home Ministry secretary-general Datuk Abdul Rahim Mohd Radzi said Malaysia was also deemed the 12th safest country, faring better than the US and Britain. The Government Transformation Programme and Crime Reduction NKRA have received international recognition, he said. (Bernama)

The Customs Department has collected RM15bn so far this year, RM716m more than the amount for the same period last year, said its director-general Datuk Khazali Ahmad. Based on the current amount collected, Customs is confident of achieving the year's projected figure of RM33bn in taxes and duties compared with RM30.3bn last year. (Bernama)

Southeast Asian banks have witnessed relative improvement in the underlying credit fundamentals, especially when compared with their global peers, said Moody's Investors Service. (The Nation)

China plans to unveil new measures aimed at boosting the flow of its currency between Hong Kong and the mainland, with plans to relax the Rmb20,000 (US$3,142) daily conversion limit for Hong Kong residents amongst the initiatives, according to persons in the know. (WSJ)

Chinese Premier Wen Jiabao proposed a possible free trade pact between the Asian powerhouse and South American nations that make up the Mercosur regional trade bloc. (AFP)

China can achieve a 10% gain in exports and imports this year if the world economy doesn’t worsen further, commerce ministry spokesman Shen Danyang said, adding that trade growth had “sound momentum” in Jun. (Bloomberg)

Japanese Prime Minister Yoshihiko Noda’s bill to double Japan’s 5% sales tax passed the lower house of parliament by a vote of 363-96 after months of wrangling, intensifying a ruling party split that could threaten its majority. (Bloomberg)

Japan's June small business confidence index fell by 1.0 point to 46.2 in Jun from 47.2 in May. (Bloomberg)

Japan’s corporate service price index rose 0.1% yoy in May (0.2% in Apr), the second straight month of increase but below forecasts for an increase of 0.3%. (RTTNews)

South Korea said it would be forced to halt imports of Iranian oil from July because of European Union sanctions. It had also agreed on a free-trade pact with Colombia that is expected to be signed in 2H12. (AFP)

Indonesian President Susilo Bambang Yudhoyono has affirmed his commitment to renegotiating mining contracts that are disadvantageous to Indonesia. (The Jakarta Globe)

Thailand’s Ministry of Commerce is confident that exports will rise by 15% this year on clear signs of recovery in the automobile and auto-parts, electronics and appliances, and food industries. (Thai Financial Post)

Thailand’s cabinet agreed to extend the exemption of diesel from excise tax for another month, to 31 Jul from 30 Jun. (Bangkok Post)

The Thai government has called a meeting of nine ministries related to the economy today to discuss measures to deal with the looming impact of the eurozone debt crisis on the Thai economy. One of the issues that may be discussed is further implementation of the minimum wage hike. (Bangkok Post)

Thailand’s Monetary Policy Committee is expecting the annual inflation rate to stabilize at 3%, which is conducive to investment and is enough to handle impacts of the global economic crisis. (Thai Financial Post)

The Philippine budget deficit soared in May to PHP19.90bn, although Finance Secretary Cesar Purisima insisted the deficit was manageable, expressing confidence the full-year fund shortfall would stay within 2.6% of GDP, or PHP279bn. (Business Inquirer)

Philippine imports fell 13.7% yoy in Apr (-3.3% in Mar), with electronics falling 22.1% to US$1.32bn (US$1.69bn in Apr 2011). Exports increased by only 7.6% to US$4.64bn from US$4.31bn in Apr 2011, bringing the balance of trade to a deficit of US$135m, sharply lower than the -US$1.22bn in Apr 2011. (Business Inquirer)

Europe’s financial crisis isn’t affecting the ability of speculative grade US companies to meet debt obligations, keeping the default rate below the historical average, according to Moody’s Investors Service. (Bloomberg)

Fitch upheld the Netherlands' top 'AAA' credit rating as the country has a credible deficit reduction plan in place despite the collapse of the government and fresh elections, whilst Banca Monte dei Paschi di Siena, the world's oldest bank, may be forced to request over €3bn in state aid. (AFP)

The supervision of euro-zone banks should be transferred to a European supervisor, possibly the European Central Bank, in return for allowing the bloc's bailout fund to help with insuring deposits and financing the liquidation of failing lenders, the European Union's top officials proposed in a report. (WSJ)

US Republican and Democratic congressional leaders are weighing whether to delay automatic federal spending cuts until Mar 2013 from Jan 2013, according to a House aide and industry officials who were briefed on the discussions. (Bloomberg)

The lengthy spells many Americans are spending without work risk leaving a lasting scar of higher unemployment on the US economy and training programs are needed to avert the damage, the OECD said, adding that policies should be adopted to make higher-income Americans pay more in taxes to help boost the US economy. (Reuters, AP)

US Conference Board consumer confidence index fell to 62.0 in Jun from a revised 64.4 in May, undershooting consensus of 63.5. (Bloomberg)

The US S&P/Case-Shiller 20-city home price index gained 0.7% mom in Apr (a revised 0.7% in Mar), exceeding consensus of 0.4%, whilst on a yoy basis, the measure fell 1.9% (a revised -2.6% in Mar), better than consensus of -2.3%. (Bloomberg)

The US ICSC-Goldman store sales index gained 2.0% wow in the 23 Jun week (0.0% in the prior week), whilst on a yoy basis, the measure increased 2.7% (3.6% in the earlier week). (Bloomberg)

US state tax revenue rose only 4.5% yoy in 1Q12 (more than 10% in 1Q11), the 10th straight quarter of growth. (Reuters)

The US faces 20% odds of a return to recession, Standard & Poor's said, although it said a slow recovery remains the company's baseline forecast for the world's biggest economy. (Reuters)

The US net investment position declined last year by US$1.56tr, the biggest ever one-year drop, to -US$4.03tr, the largest shortfall on record, the Commerce Department said. (Reuters)

US businesses numbered 7.4m in 2010, down by 36,800 from the previous year. The decline between 2008 and 2009 was 168,000 establishments. Total employment was 112m in 2010, a decline of 2.5m workers. The drop from 2008 to 2009, at the height of the recession, was 6.4m employees. (Reuters)

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