Wednesday, October 10, 2012

20121010 1453 Local & Global Economy Related News.

Electricity tariff rate will remain at its current level until Jun next year, Minister of Energy, Green Technology and Water, Datuk Peter Chin Fah Kui, said yesterday. He said the earlier plan of the government was to review the tariff every six months but the final authority was the Cabinet and it had rejected the plan. The last time the government increased electricity tariffs was in Jun last year, following an increase in the natural gas price for the power sector. Chin also said the renegotiation of the power purchase agreements (PPA) for independent power producers will result in a more competitive rate. "We should wait for the Energy Commission to make the appropriate announcement soon," he said, declining to comment further. (BT)

The  government is stepping up cooperation with fellow leading  rubber producers Thailand and Indonesia to stabilise the commodity's price in the world market. Rural and Regional Development Minister Datuk Seri Mohd Shafie Apdal said the cooperation is vital as the rubber price may fall with over production and consumers may switch to synthetic rubber if the price is too high. (Bernama)

The US NFIB Small Business Optimism Index edged down to 92.8 in Sep from 92.9 in Aug, undershooting consensus of 93.3. (Bloomberg)The US ICSC-Goldman Store Sales Index  gained 0.2% wow in the 6 Oct week (-0.3% in the earlier week), whilst on a yoy basis, the measure increased 2.8% (2.4% in the prior week). (Bloomberg)

US Treasury Secretary Timothy Geithner praised recent measures to combat the  eurozone's debt problems, saying the bloc was on "a more promising path" to resolving the crisis. (AFP)

Under the 2010 Dodd-Frank financial overhaul, the  biggest US banks will have to run two internal "stress tests" each year and publish some of the results on their websites. Under the new rules, banks with more than US$10bn in assets will conduct at least one company-run test each year. Bank-holding companies with more than US$50bn in assets and overseen by the Federal Reserve will have to perform two internal stress tests and one Fed-run test each year. The Fed announced new rounds of stress-tests for big American banks, with tests conducted on the 19 largest banks by this year and on other banks in the US$50bn-plus category in Sep 2013. (AFP, WSJ)

The world's two largest advanced economies, the US and Japan, face growing long-term risks from investors fleeing trouble spots around the world, the IMF warned. The Fund added that territorial disputes involving three of Asia's largest economies could spill over from the regional level to undermine the global economy. (WSJ)

ECB president Mario Draghi is urging eurozone leaders to move ahead quickly and put the  ECB in charge of supervising banks - a key step in overcoming the continent's crisis over too much government debt. (Agencies)

The  IMF has warned that unless the  eurozone resolves its capital crisis, European banks’ balance sheets will contract severely, further damaging growth and pushing unemployment beyond already record highs in the region. (FT)

The  IMF said it now expects the combined  GDP of the euro zone's 17 members to fall by 0.4% this year, and grow by 0.2% next. In Jul, it forecast a contraction of 0.3% this year, and a rebound of 0.7% next. (WSJ)

German Chancellor Angela Merkel told Greece that the "tough path" of painful spending cuts will pay off, as tens of thousands protested in a show of anger against her visit to the eurozone's most indebted nation. (AFP)

Greece's international creditors of the EU and IMF gave Athens an  18 Oct deadline, date of the next European Union summit, to "implement" reforms in exchange for fresh financial assistance. (AFP)

The People's Bank of China used financial instruments known as  reverse repurchase agreements, or reverse repos, a type of short-term loan to commercial banks, to inject  Rmb265bn into the money market, adding to the Rmb2.418tr injected since late Jun. (WSJ)

The  currencies of China, Malaysia and Thailand are  undervalued relative to the economies' medium-term fundamentals, and the countries should focus on fiscal policy to support growth, the IMF said. (WSJ)

China is set to become the  world's second biggest market for luxury goods after the US in five years, overtaking France, Britain, Italy and Japan, an industry report by Euromonitor said. (AFP)

The  average price of housing in  major Chinese cities in Sep was Rmb8,753 (US$1,384) psm, 0.17% mom (+0.24% in Aug) more than Rmb8,738 in Aug, according to a survey of property developers and real-estate firms released by China Real Estate Index System. (WSJ)

Japan and South Korea said they will let a  US$57bn expansion of a currency-swap agreement expire on  31 Oct, amid tensions between Asia’s second and fourth- biggest economies over disputed islands. (Bloomberg)

Japan’s current-account surplus expanded 4.2% yoy in Aug to ¥454.7bn (¥625.4bn in Jul), the first monthly rise since Feb 2011 and is higher than expectations of ¥442.0bn. (AFP)

South Korea’s finance minister Bahk Jae Wan said his nation’s economic growth will improve this quarter and policy makers should limit the scale of stimulus measures, adding that ―mobilising all available fiscal, monetary and financial policy means in a bold move with a large size may have harmful effects.‖ (Bloomberg)

US Treasury Secretary Timothy Geithner welcomed a burst of economic reforms in India which open the door wider to foreign firms, after criticising in April a deteriorating investment outlook. (AFP)

The  IMF forecast 4.9%  GDP expansion in India in 2012, a downward revision of 1.3 percentage points from the Jul forecast  — the worst mid-year recast by the IMF for any major economy. (WSJ)

Iraq could more than double its current daily oil production by 2020, vastly boosting its economy and helping to bring stability to global energy markets, the International Energy Agency forecast. (AFP)

Saudi Oil Minister Ali al-Naimi said that the oil-rich Gulf kingdom will work to satisfy global energy markets and to "moderate" prices. (AFP)

Thailand's government expects losses of about THB80bn from its  rice intervention scheme  as of Sep 2012, commerce minister Boonsong Teriyapirom said, a cost that may increase pressure on the state to scale back the programme. (Reuters)

The government estimates that  Indonesia’s unemployment will fall to 5.8-6.1% in 2013 to boost economic growth by 6.8%. (IFT)

Japan is ready to provide US$13bn of funding for infrastructure projects in Indonesia, as part of its contribution to a jointly funded Rp410tr (US$42.75bn) development plan for the greater Jakarta area. (Reuters)

Domestic motorbike sales in Indonesia fell 14% yoy in Sep, a smaller drop than Aug's 36.8% fall. (Reuters)

Vietnam’s domestic vehicle sales declined 31.3% yoy in Sep, a less steep fall compared with Aug (-32.9%). (Bloomberg)

The World Bank has lowered its economic growth forecast for Vietnam to 5.2% from its earlier forecast of 5.7% given in May, citing unfavorable environments in the region and the world. (Saigon Times)

Vietnam’s Business Confidence Index fell 13 points from 2Q12 in 3Q12 to 107, but many enterprises expressed an optimistic view about recovery if the Government continued to carry out macro-economic stabilization policies.(Saigon Times)

Myanmar President Thein Sein agreed  with his  South Korean counterpart Lee Myung-Bak to negotiate an investment guarantee pact, during talks which focused on economic ties. (AFP)

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