Malaysia: Inflation quickens, adding pressure for higher rates
Malaysia’s inflation accelerated to the fastest pace in more than 2 years in June after power tariffs were raised, adding pressure on the central bank to resume interest rate increases to contain price gains. Consumer prices rose 3.5% from a year earlier after climbing 3.3% in May. (Bloomberg)
Malaysia and Japan will invest RM750m to set up the Malaysia-Japan International Institute of Technology (MJIIT), said Japan’s ambassador to Malaysia Shigeru Nakamura. The investment, which spans seven years until 2017, includes operational cost, laboratory equipment, and infrastructure.
- Of the total, Malaysia contributed 67% while the rest was financed by the Japanese government.
- The institute is located at Universiti Teknologi Malaysia’s (UTM) Jalan Semarak international campus, which scheduled to take its first batch of 130 students by Sep this year. (BT)
The income gap between urban and rural Malaysians is bigger today than before the country gained independence, a trend that could lead to social instability, said Dr Muhammed Abdul Khalid, a Fellow with the Institute of International and Strategic Studies (ISIS). The income gap between the top 20% and bottom 40% widened from RM659 in 1970 to RM8,547 in 2009. He also warned that high inequality trend could also affect economic growth. (BT)
The government has extended the deadline for utilisation of the Working Capital Guarantee Scheme (WCGS) for Bumiputera companies until end-2012, from the end of 2011. Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop said the one-year extension would be sufficient for Bumiputera companies to fully utilise their RM1.5bn allocation under the scheme. So far, only RM300m have been utilized by them. (BT)
A total of 909,518 transactions valued at US$76.5m were undertaken by MasterCard cardholders from Malaysia and overseas during the first weekend of the 1Malaysia Mega Sale Carnival 2011 (1MMSC) from 17 Jun to 19 Jun. Mastercard Worldwide Inc in a statement said the amount was an increase of US$2.3m compared with US$74.2m spent during the first weekend of MMSC last year from 30 July to 1 Aug.
- Malaysian cardholders' spending increased to US$68.4m from US$67.1m previously with 854,776 transactions made.
- The spending of cardholders from overseas increased by 14% to US$8.1m from US$7.1m with 54,742 transactions made. (Bernama)
Malaysia has become the third largest investor in Cambodia with its investments in the country amounting to US$3.4bn from 1980. Malaysian Ambassador to Cambodia, Datuk Pengiran Mohd Hussein Datuk Pengiran Mohd Tahir Nasruddin said Malaysia'a third placing comes after China and Korea. The investment opportunities for Malaysia are still plenty especially in the agriculture sector considering the availability of large areas of land which are yet to be developed in the country, he said. (Bernama)
Malaysian ports handled 10.5% more containers in the first six months of the year, said Transport Minister Datuk Seri Kong Cho Ha. 9,856,859 twenty foot equivalent units (TEUs) containers were handled between January and June against 8,921,113 TEUs registered in the same period last year. (Bernama, BT)
U.S. home mortgage applications surged last week, racking up the biggest increase in four months on a flood of refinancing demand as interest rates remained low, an industry group said. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity spiked up 15.5% in the week ended 15 Jul. It was the largest increase since early Mar. The MBA's seasonally adjusted index of refinancing applications soared 23.1%, but the gauge of loan requests for home purchases dipped 0.1%. Fixed 30- year mortgage rates averaged 4.54%, easing from 4.55%. (Reuters)
US: Obama huddles with leaders on debt deal
President Barack Obama met separately with Republican and Democratic congressional leaders on Wednesday, keeping up efforts to try to strike a deficit reduction deal and head off default by the US government. Obama would also support a short-term extension in the debt ceiling if it allows time for a broader agreement to be enacted, the White House said Wednesday. (Marketwatch.com)
Sales of previously owned US homes dropped in Jun for the third straight month amid an unexpected spike in contract cancellations, an industry group said. Existing-home sales slipped 0.8% mom to a seasonally adjusted annual rate of 4.77m in Jun (4.81m in May), the National Association of Realtors (NAR) said. Economists had estimated sales would rise to a 4.93m rate. (AFP, NAR)
Eurozone consumer confidence eroded more than generally expected in Jul after a recovery over the past two months, according to the European Commission's preliminary estimate released. The index dropped to -11.4 in Jul (-10.3 in Jun). Economists expected a reading of -10.5. (MNI, Bloomberg)
Japan’s leading composite index, which measures the state of the economy three months ahead: May 99.6, posting the first mom rise in three months. (MNI)
A Chinese leading indicator climbed for the third straight month, adding to evidence that the world’s second-biggest economy is withstanding Europe’s debt crisis and faltering growth in the U.S. The index rose 0.5% to 155 in May (+0.1% in Apr), The Conference Board said, citing a preliminary reading. The gauge is designed to capture prospects over the coming six months. (Bloomberg)
China said that it can allow more yuan moves without jeopardizing its foreign-exchange reserves after letting the currency rise today to a 17-year high against the dollar. “The changes in the yuan’s exchange rate against the U.S. dollar causes changes in the paper value of the reserves when valued in yuan,” the State Administration of Foreign Exchange said. “This is not a real loss and will not affect the real overseas purchasing power of the foreign-exchange reserves.” (Bloomberg)
The Thai automotive industry is likely to miss its export target of 1m units this year because of a shortage of car parts over the past two months resulting from the earthquake and tsunami in Japan, the Automotive Industry Club under the Federation of Thai Industries (FTI) says. (The Nation)
Taiwan: Export orders rose the least in 4 months in June
Taiwan’s export orders increased at the slowest pace in 4 months in June as sales to Japan slumped and demand from Europe moderated. Orders climbed 9.2% from a year earlier, after an 11.5% gain in May. (Bloomberg)
Brazil: Raises key rate to 12.5%
Brazil's central bank raised the country's benchmark rate by 25bps to 12.5%, meeting widely held expectations. The central bank has raised the key rate at six consecutive meetings from the 10.75% level. (Marketwatch.com)
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