- The foreign-currency rating was affirmed at A-, one step below the local debt.
- Malaysia’s credit rating is constrained by a “moderately weak fiscal and debt profile” for its category. The country’s increasing subsidies have led to a “slow pace of fiscal consolidation” and the government’s plans to change the system and introduce a goods and service tax may be gradual given the political implications, S&P said. (BT)
Malaysians' fear of crime has improved overall, from 52.0% in a survey conducted from Nov 2010 to Jan 2011, to 48.9% in a survey in Mar-May 2011, said TNS Research International Malaysia (TNS RI). It had measured indexes in three areas, namely fear of crime related to robbery and burglary, vehicle- and violence-related crime. (Bernama)
The cabinet decided to add another National Key Result Area (NKRA) to the list of six to make it seven altogether. PM Datuk Seri Najib Tun Razak said the new NKRA dealt with the rising cost of living. The effort covers the main issues that affect the rakyat and not exclusively food, but also other things that have direct bearing on the people’s well-being.
- “We may also look at the supply chain to see how we can liberalise it to allow more food imports. Another possible plan was to use idle land for food production,” he said.
- The existing measures such as price control mechanisms and subsidies for most essential items would continue. Initiatives such as the 1Malaysia Clinic and 1Malaysia Shop would be expanded. (Bernama, The Star)
Malaysian companies have registered a potential sales of more than RM22m at the threeday global semiconductor show, SEMICON West 2011, exceeding expectations and beating the 2008 show figures (RM6.4m). Products and services on display included precision machine parts and components, test probes, test contactor solutions, Automatic Test Equipment (ATE) for semiconductor and electronic components and Test & Measurement Instrument (T&MI) that is used in integrated circuit (IC) design and manufacturing. (Bernama)
Six Bumiputera companies, with a combined market capitalisation of close to RM1bn, have been listed on Bursa Malaysia under the government's Skim Jejak Jaya Bumiputera (SJJB), said Deputy Finance Minister Datuk Dr Awang Adek Hussin. "We have 20 companies in the pipeline to be listed over the next two years. We can get about 10 companies by this year and next year," he noted. The remaining companies to be listed under the scheme were involved in various sectors including information technology (IT), biotech, manufacturing as well as oil and gas, he added. (Bernama)
The Bank of Thailand said inflation risks exceed threats to economic expansion and signaled planned spending by the nation’s incoming leader, Yingluck Shinawatra, may add to price pressures. The monetary policy committee “judged that the risks to inflation outweighed the risk to growth especially in light of continued fiscal stimulus, which may add to inflationary pressure,” according to the minutes of the July 13 meeting released on the central bank’s website. (Bloomberg)
South Korea’s economy expanded at a slower pace of 0.8% qoq in 2Q (+1.3% in 1Q) as a stronger won and Europe’s fiscal crisis weighed on exports. That matched the median estimate. The economy grew 3.4% yoy, below estimates of a 3.5% expansion.(Bloomberg)
China: Industrial profits jump 29% in first half on year
Chinese industrial companies’ profits grew at a faster pace even after the government raised interest rates and tightened credit to counter inflation. Net income climbed 28.7 percent in the first six months to CNY 2.41trn (USD 374bn) from a year earlier, the National Bureau of Statistics said on its website today. That compares with a 27.9% gain in January through May. Climbing profits for companies such as Anhui Conch Cement Co, the nation’s biggest cement producer, fuel investment that is underpinning the economy’s expansion. The International Monetary Fund forecasts that China’s gross domestic product will rise 9.6% this year, also bolstered by a government plan to build millions of low-cost homes. (Bloomberg)
Japan: Targets JPY10trn for third post-quake package
Japan will spend about JPY 10trn (USD129bn) in a third disaster recovery package to be put together after Prime Minister Naoto Kan fulfills a pledge to resign, the ruling party’s No. 2 official said. The government will fund the extra budget with deficit bonds that will be repaid over a period of five to 10 years with tax increases, Katsuya Okada, secretary-general of the Democratic Party of Japan, told reporters in Tokyo. “The responsibility for compiling the third supplementary budget and getting it passed through parliament will belong to the next prime minister,” Okada said. While the timing of the decision is up to Kan, it “won’t be too long” before he resigns, Okada added. (Bloomberg)
Australia: Consumer-price advance sends currency to record
Australian consumer prices gained more than economists forecast last quarter on higher costs for food, clothing and health care, sending the nation’s currency to a record-high against the USD. The consumer price index rose 0.9% from the previous three months, the Bureau of Statistics said in Sydney. That was more than the 0.7% median estimate in a Bloomberg News survey of 25 economists. Prices were 3.6% higher than a year earlier, compared with the median forecast of 3.4%. The report reflects lingering effects of floods in the nation’s northeast that shut mines and wiped out crops and were followed by a cyclone that tore through sugar- and banana- producing areas. Reserve Bank of Australia Governor Glenn Stevens, who has paused interest-rate increases for the longest stretch since 2007 to gauge fallout from Europe’s debt crisis and weaker local data, this week said the inflation data will help determine the trajectory of monetary policy. (Bloomberg)
EU: Rating companies find spines to savage sovereigns: Euro credit
Rating companies, lambasted by policy makers for exacerbating the credit crisis with lax grades, are slashing their assessments of government creditworthiness even as they face increased regulation. Greece, Ireland and Portugal have all had at least one rating cut to junk in recent months. Now, Moody’s Investors Service, Standard & Poor’s and Fitch Ratings are poised to remove the US’s top grade as lawmakers bicker over budget cuts before raising the nation’s debt ceiling to avert default. Moody’s four-level downgrade of Portugal on 5 July prompted calls from German Finance Minister Wolfgang Schaeuble to “curb the influence of the rating companies.” Ireland’s descent to junk on 12 July was “incomprehensible,” said European Commission President Jose Barroso. (Bloomberg)
US: Mortgage applications fell 5% last week on refinancing
Mortgage applications in the US dropped last week, led by a decrease in refinancing as borrowing costs rose. The Mortgage Bankers Association’s index declined 5% in the period ended 22 July from the prior week, the Washington- based group reported. The group’s refinancing measure decreased 5.5% from the prior week, while the purchase gauge fell 3.8%, taking it to the lowest level since February. An excess of distressed properties may be driving down home prices, restraining improvements in the housing market. Unemployment above 9% could also be preventing a sustained recovery. (Bloomberg)
US: Orders for US durable goods fall in sign investment to cool
Orders for US durable goods unexpectedly dropped in June, raising the risk that a slowdown in business investment will weigh on the world’s largest economy in the second half of the year. Bookings for goods meant to last at least three years fell 2.1% after a 1.9% gain the prior month that was smaller than last reported, the Commerce Department said. Demand for business equipment, including machinery and computers, also dropped. Manufacturers face a slowdown in consumer spending just as they are poised to rebound from the parts shortages caused by Japan’s earthquake, indicating production may keep cooling. Companies are also cutting back on hiring, which may further temper household demand. (Bloomberg)
US stocks fall on debt concern, drop in durable goods orders
US stocks fell, dragging the Standard & Poor’s 500 Index down the most in almost two months, as lawmakers indicated they were no closer to reaching a compromise on the federal debt limit. Technology and industrial stocks led declines among 10 S&P 500 groups. Caterpillar Inc. and General Electric Co. decreased more than 2.4% after a government report showed orders for durable goods unexpectedly decreased. Corning Inc. dropped 7.2% after reducing its forecast for glass demand amid lower television-sales projections. Amazon.com Inc. rallied 3.9% after its Kindle e-reader and digital-media services helped second-quarter results beat analysts’ estimates. The S&P 500 slipped 2%, its biggest decline since 1 June, to 1,304.89 at 4pm in New York. The Dow Jones Industrial Average retreated 198.75 points, or 1.6%, to 12,302.55. Treasury yields, which dropped yesterday on speculation lawmakers would reach an accord on the nation’s debt ceiling, rose today as the political stalemate continued. (Bloomberg)
New orders for big-ticket US manufactured goods fell sharply in Jun as demand weakened for aircraft and defense items, the Commerce Department said. Durable goods orders dropped 2.1% mom in Jun (+1.9% in May), to their lowest level since Feb, according to the department's seasonally adjusted data. Economists expected a 0.5% rise in orders in Jun. (AFP)
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