The international reserves of Bank Negara Malaysia (BNM) amounted to RM414.5bn (US$137.1bn) as at 15 Sep 2011, up from RM412.1bn (US$136.3bn) as at 29 Aug 2011. The reserves position is sufficient to finance 9.5 months of retained imports and is 4.5 times the short-term external debt. (BNM)
PM Datuk Seri Najib Tun Razak on Thursday unveiled four approaches for entrepreneurship development in the country to be more successful and viable. The approaches are introducing new ideas which are more creative; inject innovations in business; applying stronger and popular branding; and using websites to expand the market for products.
• Najib said among the approaches or new ideas that should be practised was to look at areas where the business competition was not that intense to the extent the margin or profit to entrepreneurs was negligible.
• PM announced RM50m initial allocation under the Small-Scale Dynamic Entrepreneur Programme to help traders, particularly in rural areas. (Bernama)
Dow posts biggest two-day slump since 2008 on policy concern
US stocks slumped, giving the DJIA its biggest two-day decline since December 2008, amid investors’ concern that policy makers are running out of tools to avoid another global economic recession. All 10 industries in the S&P’s 500 Index retreated at least 1.8% as losses were led by commodity and industrial shares. The S&P 500 fell 3.2% to 1,129.56 at 4pm New York time, dropping 7.1% in four days. The Dow lost 391.01 points, or 3.5%, to 10,733.83, bringing its two-day retreat to 5.9%. (Bloomberg)
US: Dollar gains most in 2 weeks as Fed acts to support US growth
The dollar rose the most in two weeks against the yen after the Federal Reserve moved to lower only long-term borrowing costs and on concern the Bank of Japan may act to stem gains in the nation’s currency. The Dollar Index climbed to a seven-month high after the Federal Open Market Committee said there are “significant downside risks” to the economic outlook. The euro advanced versus the yen as Greece said it will accelerate budget cuts to keep emergency loans flowing. New Zealand’s dollar weakened after data showed economic growth almost stalled. Australia’s dollar slid below parity with the greenback after a survey said China’s manufacturing may slow. (Bloomberg)
U.S. initial jobless claims decreased by 9,000 to 423,000 in the week ended 17 Sep (432,000 in the prior week), Labor Department figures showed. Economists forecast 420,000 claims. (Bloomberg, U.S. Department of Labor)
U.S. continuing claims decrease by 28,000 to 3,727,000 during the week ended 10 Sep, a from the preceding week's level of 3,755,000. (U.S. Department of Labor)
The U.S. leading index for economic indicators increased more than forecast in Aug, easing concern the economy is headed for recession. The Conference Board’s gauge of the outlook for the next three to six months climbed 0.3% in Aug (+0.6% in Jul), the research group said. Economists projected a 0.1% rise in Aug. (Bloomberg)
U.S. home prices declined in the 12 months through Jul as concerns that the economy may enter another recession sapped the confidence of would-be buyers. Prices dropped 3.3% yoy in Jul, the Federal Housing Finance Agency said in a report. On a mom basis, they rose 0.8%, more than the 0.1% gain estimated by economists. (Bloomberg)
The eurozone composite index, based on a survey of purchasing managers in services and manufacturing industries, fell below 50, indicating contraction for the first time since Jul 09, Markit Economics said in an initial estimate. The index fell to 49.2 in Sep (50.7 in Aug). Economists forecast a drop to 49.8. (Bloomberg)
• The euro-area services indicator fell to 49.1 this month from 51.5 in Aug, Markit said.
• The manufacturing gauge decreased to 48.4 from 49. Both indexes dropped more than economists had forecast. (Bloomberg)
Eurozone industrial new orders fell by 2.1% mom in Jul (-1.2% in Jun). On a yoy basis, industrial new orders increased by 8.4% (10.6% in the prior month). (Eurostat)
EU: EU presses Greece on asset sales, civil service to win aid
The European Commission pressed Greece to spell out “key elements” of a new savings package such as the timetable for state asset sales in order to qualify for the next aid installment. Stabilizing Greece’s situation is the “immediate challenge” facing European officials who are grappling with the debt crisis and trying to prevent contagion from any “uncontrolled default,” EU Economic and Monetary Affairs Commissioner Olli Rehn said. “A condition for the new program is that Greece implements all the corrective measures required, without any wavering,” Rehn said. “In the past couple of weeks Greece has gone a long way toward meeting these demands, but we are not quite there yet.” (Bloomberg)
EU: Services, manufacturing shrink more than forecast
Euro-area services and manufacturing output shrank for the first time in more than two years in September as the region’s worsening debt crisis added to concerns that the economy could slide back into a recession. A composite index based on a survey of purchasing managers in both industries fell below 50, indicating contraction, for the first time since July 2009, London-based Markit Economics said in an initial estimate. The index fell to 49.2 this month from 50.7 in August, a deeper slide than the drop to 49.8 that economists had forecasted. Europe’s economy is cooling as governments struggle to restore investor confidence in their ability to prevent a Greek default and stop the crisis from spreading. (Bloomberg)
Hong Kong: Warns inflation yet to peak after prices rise 5.7%
Hong Kong’s government warned that inflation is yet to peak after consumer prices rose 5.7% in August because of higher costs for rents and vegetables. The increase was less than a 7.9% gain in July, the biggest in 15 years that was partly caused by changes to public housing subsidies, a government statement showed. The underlying rate last month excluding such one-off factors was 6.3%, the highest since Aug 2008. Hong Kong officials are concerned that low interest rates in the US and other advanced economies will lead to capital inflows that fuel inflation and asset bubbles. (Bloomberg)
International Monetary Fund Managing Director Christine Lagarde said the European Central Bank must continue to provide “solid, reliable” funding for eurozone banks and economies as parliaments in the region pass measures into law to fight the region’s debt crisis. (Bloomberg)
China will levy a tax on resource producers based on the value and volume of their output, according to a statement on the government’s website, citing a decision from a State Council meeting. The country will adjust tax ratios on crude oil and natural gas exploration, the statement said, without giving details. It currently imposes a tax on producers of oil, gas and coal based on output volume. (Bloomberg)
China: Yuan options turn more bearish on global slump
Options traders are the most bearish on the Chinese Yuan since Mar 2009 amid concern Europe’s debt crisis and stalling US economic growth will cut demand for goods from the world’s biggest exporter. The premium earned on three-month put options granting the right to sell the Yuan was 0.725ppt more than call options on buying it today, according to the currency’s three- month risk-reversal rate tracked by Bloomberg. The contracts favored Yuan purchases by as much as 0.3ppt in June. Risk-reversal rates for the currencies of Brazil, Russia and India were the most bearish in more than a year this week. (Bloomberg)
The preliminary HSBC China Manufacturing PMI fell to 49.4 in Sep from a final reading of 49.9 in Aug. The fall in the PMI could reignite some concerns over a sharp economic slowdown in China, due to weakening global demand for Chinese goods and various tightening measures. (Wall Street Journal)
Bank Indonesia stepped in on Thursday to prop up the rupiah, intervening in the forex market and buying government bonds after selling by foreign investors drove the domestic currency sharply lower. Bank Indonesia bought Rp1.74tr (US$196m) of long-dated, mostly 21-year government bonds as it sought to stabilise a selloff that also took gains in benchmark 10-year sovereign yields to 120bp in two weeks. (Reuters)
Thai exports rose 31.1% yoy in Aug (+38.3% in Jul), according to the Ministry of Commerce. Imports surged 44% yoy to US$22.77bn because of strong demand for commodities, to post a trade deficit of US$1.2bn (US$2.8bn surplus in Jul). Economists had expected 28% yoy and 22% yoy increases in exports and imports, respectively for a trade surplus of US$1.4bn (Reuters)
Floods in the country have taken a toll on Thailand's economic growth, with losses estimated at THB58.4bn.
• The Business and Economic Forecast Centre predicts the country's economic growth this year will be in the range of 3.5%-4%, compared to earlier forecasts of 4%-4.5%.
• The last two months of flooding in the northern and central parts of the country, coupled with the Apr-May floods in the south, had had a serious impact on the economy.
• The agricultural sector has been the hardest hit, with estimated losses of THB31.5bn, followed by the trading sector THB11.7bn), public property (THB8.7bn), housing (THB2.2b), tourism (THB1.8bn) and industry (THB1.4bn). (Bernama
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