Bank Negara Malaysia's (BNM) international reserves amounted to RM412.1bn (US$136.3bn) as at 29 Aug 2011, up from RM411.6bn (US$136.1bn) as at 15 Aug 2011. The reserves position was sufficient to finance 9.6 months of retained imports and was 4.5 times the short-term external debt. (BNM)
Industrial production index (IPI) declined 0.6% yoy in Jul (+1.3% in Jun) due to the decrease of mining index (-7.5%) and moderated manufacturing output (+1.5%). Electricity production increased 4.6% in Jul. Economists had projected the IPI would rise 2.4%. On a mom basis, IPI dropped 0.6% (+3.7% in Jun). In Jan-Jul, IPI rose 0.2%. (Bernama)
Manufacturing sales rose 10.8% yoy to RM50.4bn in Jul (+10.0% in Jun). On a mom basis, the sales value increased 1.7%. In Jan-Jul, it recorded a 10.8% growth to RM341.0bn.
• Total employees engaged in the manufacturing sector increased 3.4% yoy to 1.02m in Jul (+4.3% in Jun).
• Total salaries and wages paid increased by 9.6% yoy to RM2.4bn in Jul (+11.6% in Jun).
• Average salaries & wages paid per employee rose 6.0% to RM2,354 in Jul (+7.0% in Jun).
• Productivity increased 7.2% yoy to RM49,393 in Jul (+5.4% in Jun). (Department of Statistics)
External shocks from Europe's financial crisis and faltering U.S economy are expected to dampen Malaysia's trade momentum with grow anticipated to moderate between 7% and 8% this year (18.3% in 2010). International Trade and Industry Minister Datuk Seri Mustapa Mohamed said if there were some improvement in the global economy then a 10-11% growth was doable. "But, for that we got to work extra hard on trade promotions," he said. (Bernama)
Malaysia's exports and imports are expected to grow moderately by 7.9% and 8.6% respectively this year (15.6% and 21.7% respectively in 2010), against the region's trade growth returning to historical rate of 10.0% (+18.3% in 2010). Although previously fueled by exports to the U.S. and the European Union, countries in Asia-Pacific, including Malaysia, are increasingly turning to the region itself as a source of demand for their goods and services, said the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
• "The growth of the services sector and intraregional trade are both factors that will allow the Asia-Pacific economies to continue to grow," said the Bangkok-based organisation in its Asia Pacific Trade and Investment Report 2011.
• However, exports would expand even further if Malaysia could diversify its capability to meet intra-regional demands from other major importers such as Australia, China, India, Indonesia, Russia and Turkey, it said. (Bernama)
G-7 Finance Chiefs Vow to Support Banks as Euro-Zone Crisis Roils Markets
Group of Seven finance chiefs vowed to support banks and buoy slowing economic growth as Europe’s debt crisis roiled financial markets and threatened a global recession. Renewed fears that European policy makers are failing to prevent a Greek default and contain their debt woes last week prompted investors to sell stocks and push the euro to a six- month low against the dollar. (Bloomberg)
US STOCKS-Wall St tumbles as ECB discord stirs broad fears
US stocks tumbled more than 2% on Friday, 9 Sept after the top German official at the European Central Bank (ECB) resigned in protest of the bank's bond-buying program, which has been a major tool in fighting the region's debt crisis. The resignation of Juergen Stark from the ECB throws into question policymakers' ability to deal with Europe's debt crisis, a problem that could engulf a world economy already teetering on the brink of recession. The Dow Jones industrial average dropped 303.68 points, or 2.69%, to 10,992.13. The Standard & Poor's 500 Index dropped 31.67 points, or 2.67%, to 1,154.23. The Nasdaq Composite Index dropped 61.15 points, or 2.42%, to 2,467.99. (Financial Daily)
US: Obama channels economic frustration with USD447bn plan
President Barack Obama channeled the national frustration with the economy that threatens his political standing and challenged the US Congress to pass a USD447bn jobs plan tilted heavily toward the Republican prescription of tax cuts. The president, speaking before a joint session of Congress, demanded six times that lawmakers act “right away” on a plan that would boost spending on infrastructure, stem teacher layoffs and cut in half the payroll taxes paid by workers and small business owners.(Bloomberg)
U.S: Wholesale inventories rose more in July than a month earlier, boosted by automobiles and computer equipment, as sales stagnated. The 0.8% increase in inventories followed a 0.6% rise in June, Commerce Department figures showed in Washington. Sales were little changed in July. (Source: Bloomberg)
U.K: Producer prices increased the least in a year in August as a drop in energy costs eased pressure on manufacturers' margins. Prices charged at factory gates rose 0.1% from July, when they gained a revised 0.3%, the Office for National Statistics said. Input prices dropped 1.9% on the month, the most since April 2009. (Source: Bloomberg)
EU: Papandreou sets new taxes, cuts for Greece to skirt default
Prime Minister George Papandreou, vowing to avoid a default and keep Greece in the euro, approved new measures to help plug a yawning budget gap as resistance builds at home and in Europe to extending more aid to the European Union’s most-indebted nation. The Cabinet voted on Saturday to cut one month’s wages from all elected officials and impose an annual charge on all property for two years, to be levied through electricity bills to ensure rapid collection, Finance Minister Evangelos Venizelos told reporters in the northern Greek city of Thessaloniki. (Bloomberg)
Germany: Inflation slowed less than initially projected in August, as energy costs increased. The inflation rate, calculated using a harmonized European Union method, fell to 2.5% from 2.6 percent in July, the Federal Statistics Office in Wiesbaden said. From the previous month, prices remained unchanged. (Source: Bloomberg)
China: Money growth slows to 6-year low as tightening bites. New lending rose to CNY548.5b (USD85.9b) in August and money supply growth expanded at the slowest pace in at least six years. New local-currency lending compared with the CNY500b median estimate in a Bloomberg News Survey of 26 economists and CNY492.6b in July. M2, the broadest measure of money supply, rose 13.5%, the People's Bank of China said in a statement on its website. (Source: Bloomberg)
China: Shows resilience as imports, exports top expectations. Imports climbed to a record and exports grew more than expected last month, indicating resilience in the world's second-biggest economy as the U.S. and European recoveries falter. Inbound shipments jumped 30.2% from a year earlier to USD155.6b, the customs bureau said on its website. Exports climbed a more-than-expected 24.5%, leaving a trade surplus of USD17.76b. (Source: Bloomberg)
China: China hard landing ’distant scenario’ as data signal strength
China’s record imports and a rebound in lending signaled strength in demand that offers a bright spot in a global economy contending with Europe’s debt crisis and weakening US job gains. Shipments from abroad jumped 30% and new local- currency loans were a more-than-forecast RMB548.5bn (USD86bn), government reports in the past two days showed. At the same time, August figures released on 9 Sept indicated that policy makers have made progress in stemming inflation, which eased from a three year high, to a 6.2% year-on-year pace. (Bloomberg)
Japan: Economy contracted more than the government initially estimated in the second quarter as capital spending decreased, adding to concern the stronger yen may derail the nation's recovery from the March earthquake. GDP shrank at an annualized 2.1% rate in the three months ended June 30, more than the 1.3% contraction reported last month, the Cabinet Office said. (Source: Bloomberg)
Japan: Toyota losing no. 1 makes Prius priority to escape fading Japan
Two weeks after Japan’s 11 March earthquake knocked out more than 650 of Toyota Motor Corp.’s suppliers, halting worldwide production, the automaker had to decide where to focus its resources. It picked the Prius. By choosing the Prius ahead of the Corolla and Camry sedans that enabled Toyota to become global No. 1 by 2008, President Akio Toyoda is staking the future of Japan Inc. on hybrid technology as the solution to the nation’s worst disaster since World War II and the company’s initial indifference to customer complaints that prompted its biggest recall. (Bloomberg)
Canada: Canadian employment falls for first time in five months
Canada unexpectedly lost jobs for the first time in five months in August, led by goods-producing industries such as construction and natural resources. Employment fell by 5,500 after rising by 7,100 in the previous month, Statistics Canada said in Ottawa, and the jobless rate rose to 7.3% from July’s 7.2%, which was the lowest since December 2008. Bloomberg News surveys called for job gains of 21,500 and unemployment to stay at 7.2%. (Bloomberg)
Egypt: Israel feeling more isolated amid shifts in Mideast
With its embassy in Cairo ransacked, its ambassador to Turkey expelled and the Palestinians seeking statehood recognition at the United Nations, Israel has found itself increasingly isolated and grappling with a radically transformed Middle East where it believes its options are limited and poor. The diplomatic crisis – it which winds unleashed by the Arab Spring are now casting a chill over the region – was crystallized by the scene of Israeli military jets sweeping into Cairo at dawn Saturday to evacuate diplomats after the Israeli Embassy had been besieged by thousands of protestors. (Malaysian Reserve)
Australia: Australia jobs data underestimate demand for workers
Australia’s rise in unemployment last month doesn’t fully reflect the demand for workers in an economy that “continues to outperform” the US and Europe, Treasurer Wayne Swan said. Australia’s jobless rate jumped to a 10-month high of 5.3% in August, the second straight monthly rise, according to a government report on 8 Sept. Prime Minister Julia Gillard’s administration is trying to counter declines in consumer and business sentiment that last month helped lift the ranks of the jobless to 636,800, the most since October. (Bloomberg)
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