20110829 1026 Local & Global Economic Related News.

Broad money (M3) expanded at a slower annual rate of 11.6% in July (12.4% in Jun). Net  financing to the private sector grew at a slower pace of 12.7% in July (12.9% in Jun) due  to a moderation in  outstanding loans (12.9% vs. 13.5% in Jun) and net issuances of  private debt securities.  (Bank Negara Malaysia)

PM Datuk Seri Najib Tun Razak on last Friday announced the establishment of a RM2bn  Facilitation Fund for the use of Bumiputera companies that qualify through Teraju or the  Bumiputera Agenda Coordinating Unit. The set-up of the fund, a result of joint efforts  between Teraju and the Public-Private Partnership Unit, will be for the use of qualified  Bumiputera companies in the Entry Point Project initiatives.  
• The fund will also be a catalyst for Bumiputera companies to carry out big projects with a  minimum qualifying project investment value of RM20m.  
• Based on Teraju's estimates, the fund is expected to generate more than RM10bn in  private investments. (Bernama)  

More than RM8bn worth of projects will be awarded to bumiputra companies as part of  the MY Rapid Transit (MRT) project, according to PM Datuk Seri Najib Tun Razak. He  said several packages in the RM20bn project had been specially allocated to bumiputra contractors. The packages are civil and infrastructure works, Tenaga Nasional Bhd power  supply, centralised procurement, tunnel and underground works, and MRT systems, PM  said. (The Star)  

PM Datuk Seri Najib Tun Razak on last Saturday launched 250 1Malaysia D'Mart shops  at Felda schemes throughout the country. With the shops, people at Felda can save up to  40% in expenses, and this will be of great help to them, he noted. (Bernama)  

Bank Negara Malaysia Governor  Tan Sri Dr Zeti Akhtar Aziz is among six heads of  central banks to be named  World Top Central Bankers for 2011. She received the  impressive rating from the Global Finance magazine  together with Amando Tetangco of  the Philippines, Taiwan's Fai-Nan Perng, Reserve Bank of Australia Governor Glenn  Stevens and Bank of Israel Governor Stanley Fischer. Zeti was similarly rated last year.  (Bernama)

Federal Reserve Chairman Ben S. Bernanke said the central bank still has tools to  stimulate a recovery that has been weaker than forecast while sticking to his view that  growth will pick up. Bernanke, in a speech on 26 Aug to central bankers and economists at  an annual forum in Jackson Hole, Wyoming, didn’t give details on the measures the Fed  might take or signal when or whether policy makers might deploy them. A second day has  been added to the next Federal Open Market Committee meeting in Sep to “allow a fuller  discussion” of the economy and the Fed’s possible response, Bernanke said. (Bloomberg)

 The  U.S. economy grew less than previously estimated in 2Q, capping the weakest six  months of the recovery that began in mid-2009. Gross domestic product climbed at a 1%  annual rate in 2Q, down from a 1.3% prior estimate, revised Commerce Department  figures showed. Economists called for a 1.1% increase. The reduction reflected a smaller  increase in inventories and fewer exports. (Bloomberg)  

U.S. real personal consumption expenditures edged up a meager 0.4% in 2Q, compared  with an increase of 2.1% in 1Q. Economists expected a reading of 0.2% in 2Q. (Xinhua,  Bloomberg)  

The price index for U.S. gross domestic purchases increased 3.3% in 2Q, an upward  revision of 0.1% pt. The upward revision to prices was primarily to personal consumption  expenditures and reflected an upward revision to the price for financial services based on  Call Report data. Economists expected a reading of 2.3%. (Bloomberg)  

U.S. consumer confidence dropped in Aug to the lowest level since Nov 08, pointing to little  pickup the biggest part of the economy. The Thomson Reuters/University of Michigan final  index of consumer sentiment fell to 55.7 in Aug (63.7 in Jul). Economists projected a  reading at 55.8 after a preliminary reading of 54.9. (Bloomberg)  

Japan’s  core consumer price index (CPI), which includes oil products but excludes  volatile prices of fresh fruit, vegetables and seafood, rose 0.1% yoy in Jul (-0.2% in Jun).  Economists estimated a 0.1% fall. (Reuters)  

 Japan’s so-called core-core inflation index, which excludes food and energy prices and  is similar to the core index used in the United States, fell 0.5% in Jul (-0.8% in Jun).  Economists expected a reading of -0.6% in Jul. (Reuters, Bloomberg)  

Singapore reported that growth in industrial production slowed to 7.4% yoy in Jul (+10.7%  in Jun). Economists expected a reading of 9.0% in Jul. (Bloomberg)  

Thailand’s  manufacturing output fell 1.1% yoy in Jul (+3.8% in Jun). Economists  expected a reading of 5.9%. (Reuters)  

International Monetary Fund managing director Christine Lagarde warned that the world  economy is in a “dangerous new phase” and that officials must take new steps to  strengthen growth. Lagarde said the U.S. should arrest a slide in house prices and  European banks must be required to boost capital to prevent the continent’s debt crisis  from infecting more countries. The U.S. and European  Union should enforce long-term  budget discipline to free up cash for short- term stimulus, she said. (Bloomberg)  

The Philippines’ monetary policy is appropriate “for the moment” as it closely monitors  how global developments, including the Federal Reserve’s policy, impact capital flows and  commodity prices, Bangko Sentral ng Pilipinas Governor Amando Tetangco said. “Should  the current environment shift, the BSP is ready to make any necessary changes to ensure  that inflation expectations remain well-anchored and inflation is kept within target,”  Tetangco said. (Bloomberg)  

Chinese industrial companies’ profits rose 28.3% yoy in the first seven months (28.7%  in 1H), helping to support the expansion of the world’s fastest-growing major economy. Net  income climbed to Rmb2.8tr (US$438bn), the National Bureau of Statistics said (Rmb2.4tr  in 1H). (Bloomberg)

China has ordered banks to include their margin deposits in  required reserves at the  central bank to mop up excessive liquidity, banking sources said, the latest move in  Beijing's campaign to rein in worrisome inflation. Commercial banks will be required to include margin deposits paid by their clients to secure the issuance of banker's  acceptance, letters of guarantee and letters of credit in their required reserves. Such  deposits amounted to Rmb4.4tr (US$688.6bn) at the end of Jul, according to central bank  data. (Reuters)  

European Central Bank President Jean-Claude Trichet said the  U.S. economy features  regional diversity similar to that of the euro area, urging policy makers to restructure their  economies to promote smoother growth. (Bloomberg)  

Japan approved a bill to subsidize electricity from renewable sources, joining European  nations in shifting away from nuclear power after the Fukushima reactor meltdowns in Mar.  (Bloomberg)