The Domestic Trade, Cooperatives and Consumerism Ministry will propose to the Cabinet, to open the running of Kedai Rakyat 1Malaysia (KR1M) to the public. Its minister Datuk Seri Ismail Sabri Yaakob said the proposal was to provide an opportunity to the public, including sundry-shop operators, to run these shops themselves without the involvement of Mydin as the management. "The committee has so far agreed with the idea but we will discuss the matter at the Cabinet meeting today for approval," he said. The ministry was studying the terms and conditions to ensure the KR1M policy would not be affected, he added. (Bernama)
Asean is on track to realise the Asean Economic Community (AEC) by 2015 despite the many challenges, Minister of International Trade and Industry, Datuk Seri Mustapa Mohamed said. The 10-nation grouping has to-date met its commitments in goods, services and investment, and has implemented 83.8% of the measures under phase I of the AEC Blueprint for the period of 2008-09 and 64.1% of the measures under phase II (2010-11). Malaysia implemented 103 out of 110 measures with an implementation rate of 93.6%, he noted. (Bernama)
Asia: South Korea holds rates, BOJ talks stimulus on world risks
The Bank of Korea kept interest rates on hold and the Bank of Japan said its board had discussed more monetary easing, in further signs policy makers are moving to protect growth as the global economy weakens. Governor Kim Choong Soo and his board held the benchmark seven-day repurchase rate at 3.25% for the fourth straight month, the central bank said yesterday. In Japan, records of a BOJ meeting last month said “a few” members discussed extra stimulus. Asian policy makers are bolstering efforts to defend their economies from weakening growth in the US and Europe, with Indonesia’s central bank unexpectedly cutting borrowing costs and the Philippines unveiling a stimulus plan this week. (Bloomberg)
Some 10 Malaysian companies have been found affected by severe flooding in Thailand. International Trade and Industry Minister Datuk Seri Mustapa Mohamed said most of them were involved in the automotive and electrical and electronic sectors. "Those who are affected operate in the flooded Ban Wa, Rojana and Navanakorn industrial parks," he said. (Bernama)
Real estate sector is expected to expand by 6.8% this year and 5.7% next year, despite a challenging external economic environment. Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the domestic property sector is expected to maintain its growth momentum as the 2012 Budget is sufficiently accommodative to mitigate any systematic disruption to the economy. He also said that the business services sector will experience similar growth of 6.8% this year and 5.7% next year. The future of real estate development in the country is bright as the government plans to build a public transportation system and establish feeder services in the next 10 years, he added. (Bernama)
The Malaysian Institute of Economic Research (MIER) has revised its GDP growth forecast for 2011 to 4.6% from 5.2% previously. Its executive director, Dr Zakariah Abdul Rashid, attributed the downward revision to weaker export growth due to increasing regional and global economic uncertainties. However, the implementation of Economic Transformation Programme (ETP) projects and handouts from the 2012 Budget, designed to cushion the higher cost of living, will boost domestic demand, he said. The MIER also cut its 2012 GDP growth forecast to 5.0% from 5.5%. Inflation is likely to moderate to 3.1% this year before trending lower to 2.7% in 2012. Monetary policy will remain fairly accommodative to support growth and the overnight policy rate is anticipated to stay at 3.0% in 2011 to 2012. The MIER expects the ringgit to hover around the 3.20 level per US$ this year before appreciating to 3.10 in 2012. (Bernama)
The US$8bn (RM25.04bn) Kuala Lumpur International Financial District (KLIFD), to be jointly developed by 1Malaysia Development Bhd (1MDB) and Abu Dhabi’s Mubadala Development Corp, will get off the ground early next year. “The master plan is close to completion. We are working closely with City Hall to get the details ironed out,” said its CEO Shahrol Azral Ibrahim Halmi. Over the next six months, 1MDB will intensify talks with prospective investors and developers, he said without revealing details. (Financial Daily)
The Malaysian Franchise Association (MFA) expects to see 25-30% growth in the franchise industry next year onwards, helped by the tax rebate incentive for franchise fee announced during 2012 Budget. Over the last decade, the local franchise industry has been growing at a pace of 10-15% a year, said MFA chairman Abdul Malik Abdullah. (BT)
The US trade deficit was little changed at a four-month low of US$45.6bn in Aug (-US$44.8bn in Jul) as near- record exports helped keep the economy expanding. Economists projected a US$45.8bn deficit. (Bloomberg)
US initial jobless applications decreased by 1,000 to 404,000 in the week ended 8 Oct (401,000 in the prior week), Labor Department figures showed. Economists forecast 405,000 claims. The number of people continuing to collect jobless benefits dropped by 55,000 to 3.67m in the week ended 1 Oct, the fewest since mid Apr. (Bloomberg)
A widening gap between rich and poor is reshaping the US economy, leaving it more vulnerable to recurring financial crises and less likely to generate enduring expansions. Left unchecked, the decades-long trend toward increasing inequality may condemn Wall Street to a generation of unimpressive returns and even shake social stability, economists and financial-industry executives say. (Bloomberg)
The US Congress approved free- trade agreements with South Korea, Colombia and Panama, bringing an end to years of stalemate and offering what supporters said was the biggest opportunity for exporters in decades. The South Korea deal removes duties on almost two-thirds of American farm exports, and phases out tariffs on more than 95% of industrial and consumer exports within five years. (Bloomberg)
US: Four-month low trade gap may help growth
The US trade deficit was little changed at a four-month low of USD45.6bn in August as near- record exports helped keep the economy expanding. Shipments abroad valued at USD177.6bn were the second-highest ever, the Commerce Department said in Washington. Growing sales overseas, particularly to economies in Asia and Latin America, are underpinning manufacturers like Alcoa Inc. Those gains may assist in sustaining the expansion by counterbalancing the slowdown in US demand that was reflected in a third consecutive drop in imports. (Bloomberg)
EU: Slovaks ratify Euro bailout fund, finish approval process
Slovakia approved Europe’s enhanced bailout fund, completing ratification across the 17 euro countries as the region’s leaders prepare for a summit. Lawmakers voted 114 to 30 with three abstentions to support the European Financial Stability Facility in the second attempt this week after parliament failed to approve the measures on 11 Oct. Enhancing the powers of the EFSF, the temporary bailout fund, is crucial for adopting the key element in the strategy to prevent contagion from the debt crisis that has spread from Greece to other countries. (Bloomberg)
UK: Trade deficit narrows as exports increase to record
The UK trade deficit on goods narrowed in August as exports rose to a record and imports declined. The goods-trade gap shrank to GBP7.77bn (USD12.2bn) from GBP8.15bn in July, the Office for National Statistics said yesterday. Exports rose 0.6% to GBP25.5bn, the highest since current records began in 1998. The Bank of England restarted asset purchases last week amid threats to the economy and the financial system from the debt turmoil in Europe, Britain’s biggest trading partner.(Bloomberg)
The European Central Bank said in its monthly report that while the economy is facing “intensified downside risks,” inflation may remain above its 2% ceiling for the rest of 2011. (Bloomberg)
Risks to Europe’s bank industry are “rapidly” mounting as the fallout of Greece’s debt crisis engulfs the whole region, said Martin Andersson, director- general of Sweden’s Financial Supervisory Authority. (Bloomberg)
Bank of Korea kept its benchmark interest rate unchanged at 3.25%, marking the fourth month that rates have been on hold. The decision was in line with market expectations. (Bloomberg)
The damage estimate from Thailand’s floods was revised up from THB130bn or 1-1.3% pt, to THB156.7bn or 1.3-1.5% of GDP according to the University of Thai Chamber of Commerce. (The Nation)
Severe floods as well as global economic uncertainties pressured the Thai consumer confidence index in Sept. The index dropped for two consecutive month from 83.4 pt in Aug to 81.8 in Sep. The University of Thai Chamber of Commerce which conducted the confidence poll attributed the lower confidence to many negative factors from lower economic growth forecast, a sharp plunge in the Stock Exchange of Thailand Index, a higher cost of living, and prolonged floods. (The Nation)
Eight industrial estates and parks in Thailand are in danger of being flooded, warns Industry Minister Wannarat Channukul. They include Bang Chan and Lad Krabang in Bangkok, Bang Phli and Bang Poo in Samut Prakan, Kaeng Khoi in Saraburi, Hi-Tech in Ayutthaya, and Navanakorn and Bangkradee in Pathum Thani. (Bangkok Post)
China’s Business Climate Index fell to 133.4 in 3Q11 (135.6 in 2Q11), while the Entrepreneur Confidence Index decreased to 129.4 in 3Q11 (132.4 in 2Q11). (Bloomberg)
China exports rose 17.1% yoy in Sep (24.5% in Aug), while imports expanded 20.9% yoy (30.2% in Aug). The trade surplus was US$14.51bn, the smallest since May. Economists expected exports to grow 20.5% yoy and imports to increase 24.2% yoy. (Bloomberg)
China’s passenger-car sales rose 8.8% yoy to 1.32m units in Sep (+7.3% in Aug). Total sales of vehicles including buses and trucks rose 5.5% yoy to 1.65m units in Sep. (Bloomberg)
India’s wholesale prices of agricultural products gained 9.32% yoy in the week ended 1 Oct (9.41% the previous week). (Bloomberg)
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