20110902 1103 Local & Global Economic Related News.

Malaysia has performed overwhelmingly in wooing  foreign direct investments (FDIs) in  the first half of this year, having attracted RM21.3bn vis-a-vis RM12.1bn in the same period  last year. International Trade and Industry Minister Datuk Seri Mustapa Mohamed said with  such high FDI inflow, he believed the FDI for this year would exceed the RM29.3bn  attained last year (RM5.0bn in 2009).  
• The strong recovery in the FDI inflow would also ensure realisation of the projected  RM3.0bn private sector investment this year.  
• Between Jan and July, 514 manufacturing projects totalling RM31.7bn were approved.  He said 313 projects, with a cumulative investment  of RM15.9bn (50.2%) were new  projects, while 201 projects, with a combined investment of RM15.8bn (49.8%), were  expansion and diversification projects.
• The approved foreign investments are primarily in the electrical and electronics  industry, accounting for RM7.2bn; metal-based products (RM2.4bn); food processing  (RM1.8bn); chemical and chemical products (RM1.0bn); transportation apparatus  (RM902.4m); petroleum products, including petrochemical (RM520.8m); and  fabricated metal products (RM520.7m).
• The top investing countries are Japan, with RM2.4bn total investments, the U.S.  (RM2.3bn); Singapore (RM1.9bn); the Netherlands (RM1.2bn); and Taiwan  (RM1.2bn). (Bernama)

Singapore’s domestic loan book of banks grew by 27.8% yoy in Jul (26.2% in Jun), the fastest pace in 12 years. On a mom basis, loans rose 2%. (CNA, Straits Times)

Thailand: Inflation rate accelerates to fastest pace since 2008
Thailand’s inflation rate accelerated in August to the fastest pace since 2008 as rising food prices countered a decline in oil costs. An index of consumer prices climbed 4.29% y-o-y, the Ministry of Commerce said, compared with a 4.08% pace in July. The Bank of Thailand signaled it may be nearing the end of monetary tightening after raising the benchmark interest rate for the seventh straight meeting last month. (Bloomberg)

South Korea: Inflation accelerates to 3-year high of 5.3%
South Korea’s inflation accelerated to the fastest pace in three years in August on rising food prices, adding to pressure on the central bank to increase borrowing costs. Consumer prices rose 5.3% y-o-y, after a 4.7% gain in July, Statistics Korea said. Prices rose 0.9% from July. The Bank of Korea needs to weigh whether the threat of inflation is bigger than risks to growth as slowing global demand weighs on industrial output and corporate and consumer confidence. (Bloomberg)

China: Manufacturing index is near 29-month low in August
Chinese manufacturing index stayed near the borderline between expansion and contraction in August, signaling limits for more monetary tightening. The Purchasing Managers’ Index was at 50.9, from the 29- month low of 50.7 in July, the China Federation of Logistics and Purchasing said. Premier Wen Jiabao signaled yesterday that a faltering global recovery and turbulence in financial markets have yet to convince the government to switch from a focus on taming inflation. (Bloomberg)


China’s Purchasing Managers’ Index was at 50.9 in Aug, from the 29-month low of 50.7 in Jul, the China Federal of Logistics and Purchasing said. A reading above 50 indicates expansion. Economists expected a reading of 51.0. (Bloomberg)
 
Hong Kong's  retail sales soared 29.1% yoy in Jul (+28.8% in Jun)as an improving economy and increase in the number of tourist arrivals bolstered local spending.  After taking out the inflationary effect, retail sales by volume jumped 22.4% yoy. (China Daily)

Japanese household spending fell 2.1% yoy in Jul (-3.5% in Jun) in price-adjusted real terms , government data showed, with the pace of falls narrowing in a sign consumption is recovering from the Mar natural disaster. Economists forecast for a 3.0% decline. (Reuters)
 
Japan’s jobless rate stood at a worse-than-expected 4.7% in Jul (4.6% in Jun), excluding figures from the disaster-hit northeast of the country, the government said. The market had expected the rate to be flat at 4.6%. (AFP)
 
Japanese retail sales rose 0.7% yoy in Jul (+1.2% in Jun) to mark their second straight month of increases, government data showed, as consumer spending recovers following a large earthquake, tsunami and a nuclear crisis in Mar.  Economists  forecast for a 1.0% increase. (Reuters)
 
Japanese manufacturing activity slowed in Aug for the first time in two months as worries about a strong yen and subdued demand from  China weighed on new export orders, a survey showed. The Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 51.9 in Aug from 52.1 in Jul. (SBT)
 
Japan's industrial production rose by 0.6% mom in Jul (+3.8% in Jun), government data showed. Economists expected a 1.5% gain. (AFP)
 
Japan's vehicle production fell 8.9% yoy in Jul for the 10th consecutive monthly decline, an industry body said. Output of passenger cars in July declined 10.4% to 669,331 units. (Mainichi Japan)

India: Food inflation quickens, sustaining interest-rate pressure
India’s food inflation accelerated to a four-month high and exports surged, sustaining pressure on the central bank to raise interest rates even as growth slows. An index measuring wholesale prices of farm products including rice and wheat rose 10.05% in the week ended 20 Aug y-o-y, the commerce ministry said. Merchandise shipments jumped 81.8% to USD29.3bn in July y-o-y. Gains in food prices have kept India’s inflation rate the highest among major economies in Asia, prompting central bank Governor Duvvuri Subbarao to boost borrowing costs at a record pace since mid-March 2010. (Bloomberg)

Australia: Retail sales, business investment exceed estimates
Australian retail sales advanced for the first time in three months and mining projects boosted business investment, sending the nation’s currency higher and prompting traders to reduce bets on interest-rate cuts. Sales advanced 0.5% in July m-o-m, when they fell 0.1%. Australia, the only developed economy to avoid a recession during the global contraction of 2009, is undergoing what Reserve Bank Governor Glenn Stevens last week called a “structural adjustment” as the biggest mining boom in more than a century drives the nation’s currency to a record. The rising local dollar is hurting exporters, and the unemployment rate last month rose for the first time since October 2010. (Bloomberg)

UK: Manufacturing contracts most in more than two years
UK manufacturing shrank the most in more than two years in August as demand from domestic and overseas customers weakened. New orders fell the most in almost 2 1/2 years and employment declined for the first time in 17 months. Manufacturers said the drop in demand was due to weaker domestic and export sales and “rising global economic uncertainty.” (Bloomberg)

Eurozone economic sentiment fell to 98.3 in Aug (103 in Jul) with optimism declining in all sectors. Economists expected a fall to 100.5. (Reuters)
 
Eurozone consumer sentiment declined to -16.5 in Aug from -11.2 in Jul. Economists expected a reading of -16.6. (Reuters, Bloomberg)
 
Eurozone services confidence halved to 3.7 in Aug from 7.9 in Jul. against Economists expected an easing to 6.3. (Reuters)
 
Eurozone industry sentiment index fell into negative territory -- at -2.9 in Aug (0.9 in Jul) -- for the first time since Sep 10, against expectations of a drop to -1.5. (Reuters)
 
Eurozone inflation was 2.5% yoy in Aug, the same as in Jul. The reading matched economists’ expectations. (Reuters)
 
Eurozone unemployment rate was 10% in Jul, unchanged from Jun. But the number of unemployed in the eurozone rose by 61,000 to 15.757m in Jul. (Reuters)
 
The eurozone manufacturing purchasing managers' index compiled by Markit logged 49.0pts in Aug, down from 50.4 in Jul. Any score below 50 indicates contraction, while anything above suggests expansion. Economists expected a reading of 49.7. (AFP, Bloomberg)

US: Consumer comfort falls as confidence in economy slumps
Consumer confidence declined last week as sentiment about the US economy slumped to the second lowest level in two years. Unemployment above 9%, limited wage growth and a volatile stock market are deflating consumers’ moods, posing a threat to household spending. The report showed confidence among homeowners was close to an all-time low as property values remain depressed. (Bloomberg)

US stocks retreat as treasuries gain before August jobs report
US stocks slid, halting a four-day rally, Treasuries advanced and commodities declined as investors turned their attention to tomorrow’s report on American jobs to gauge the outlook for the economy. The S&P 500 Index lost 1.2% to 1,204.42 after surging 5.1% in the previous four sessions. The gain in Treasuries drove 10-year yields down nine basis points to 2.13%. The Dow Jones Industrial Average fell 1.0% to 11,493.57. Payrolls may have climbed by 68,000 in August following a 117,000 increase in July, according to the median forecast. Concern about the employment data overshadowed an Institute for Supply Management report that showed growth in US manufacturing. (Bloomberg)

U.S. nonfarm business sector labor productivity decreased by 0.7% yoy in 2Q, the U.S. Bureau of Labor Statistics reported, with output and hours worked rising 1.3% and 2.0%, respectively. Economists expected a reading of -0.5%. (Bloomberg)
 
U.S. initial jobless claims fell to 409,000 in the week ended 27 Aug (421,000 in the prior week), the Labor Department said. Economists were predicting initial claims would fall to 407,000 during the week. Continuing claims -- which include people filing for the second week of benefits or more -- fell by 18,000 to 3.7m in the week ended 20 Aug, the most recent data available. (CNNMoney)
 
U.S. construction spending fell by 1.3% mom in Jul (+1.6% in Jun), the biggest since Jan, Commerce Department figures showed. Economists  called for a 0.2% increase. (Bloomberg)