20111104 1040 Local & Global Economic Related News.

Malaysia is confident the  investment imbalance with China can be  narrowed soon if it continues to engage Chinese enterprises not only from big  cities, but also from the second- and third-tier cities like Chengdu and Nanning.  Minister of International Trade and Industry, Datuk Seri Mustapa Mohamed,  said Malaysia has nearly US$6bn worth of investments in China, while China  invested only about US$500m in Malaysia.  Malaysia was taking three major initiatives to engage the Chinese more  effectively.  First, the ministry was committed to undertake more investment and  trade missions to China, at least twice a year. Second, the  newly-established Malaysia-China Economic Cooperation  Working Group (ECWG) to identify various bilateral cooperation  projects in nine areas. The ECWG will draw up a five-year development  programme by the middle of next year for implementation.  The third initiative was that Malaysia and China would work closely to  ensure the successful establishment of the Malaysia-China Qinzhou  Industrial Park.  On bilateral trade, Mustapa said, both countries had reaffirmed their  commitment to double the value within five years following the  implementation of several bilateral initiatives. Trade between Malaysia  and China totalled US$45.6bn last year. (Bernama)

The corporate bond market maintained its strong momentum in 3Q11 with  RM21.41bn issuance, taking the total issuance to RM52.6bn (+12.6% yoy) for  the first nine months. A new peak was reached in Aug, when RM13.3bn of debt  papers was issued  - the highest monthly issuance so far this year, said RAM  Ratings Services Bhd.  Sukuk issuance almost tripled year to date to RM42.1bn, accounting for  73% of total bond issuance as at end-Sep 11.  RAM said it expects bond issuance to be on track towards achieving its  projection of RM60bn for the full year. (Bernama)

A Competitions Appeal Tribunal will be set up at the end of this year, said  Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail  Sabri Yaakob. The tribunal, which would  start functioning once the  Competitions Act 2010 is enforced on 1 Jan 12, would hear appeals against cases  that had been decided by the Malaysian Competitions Commission (MyCC), he  said. (Bernama)  

China: Non-manufacturing industries grew at a slower pace in October as weakness in investment in real estate and railways offset strength in consumer demand, a survey indicated. A purchasing managers' index fell to 57.7 from 59.3 in September, the China Federation of Logistics and Purchasing said on its website. The gauge, released with the statistics bureau, includes construction. (Source: Bloomberg)

India: Services industry moderated in October for a third straight month after the central bank's record interest-rate increases. The Purchasing Managers' Index fell to 49.1 from 49.8 in September, HSBC Holdings Plc and Markit Economics said in an e-mailed statement. Readings above 50 indicate expansion. (Source: Bloomberg)

Australia: Retail sales advanced in September for a third straight month, led by spending on household goods and at restaurants. Sales gained 0.4% MoM, when they rose 0.6% MoM. (Source: Bloomberg)    

Thailand: Thai manufacturing falls as floods threaten slump in production
Thailand’s industrial output fell unexpectedly in September as the global recovery faltered, with the worst floods in almost 70 years threatening to exacerbate the slowdown. The industrial production index declined 0.5% from a year earlier, after a revised 6.8% gain in August, the Office of Industrial Economics said in a statement. The Bank of Thailand lowered its economic growth forecasts for 2011 last week after floods swamped about 10,000 factories and stopped production at companies including Honda Motor Co. Thailand serves as a production hub for Japanese carmakers and electronics firms. (Bloomberg)

India: India’s food inflation quickens to 12.21%, a nine-month high
India’s food inflation accelerated to the highest level in nine months after prices of vegetables, milk and meat climbed. An index measuring wholesale prices of agricultural products gained 12.21% in the week ended 22 Oct from a year earlier, the commerce ministry said in a statement in New Delhi. It rose 11.43% the previous week. Still, the Reserve Bank of India has signaled a pause in its monetary tightening as Europe’s debt crisis threatens economic growth, saying past interest-rate increases will slow consumer demand. (Bloomberg)

South Korea: Lawmakers delay passage of trade pact with US
South Korea’s ruling party postponed voting on a free-trade agreement with the US for at least a week to get more support from opposition lawmakers who had physically blocked the pact’s passage through committee.

The pact, initially agreed on by presidents George W. Bush and Roh Moo Hyun more than four years ago, was delayed as their successors Barack Obama and Lee Myung Bak sought wide support for the deal. While Obama signed the agreement into law on 21 Oct after Congress passed it earlier that month, South Korea’s main opposition Democratic Party has stalled the government’s efforts since June to put the bill to a vote. (Bloomberg)
UK: King says BOE staff won’t need ‘vast’ pay for regulatory roles
Bank of England Governor Mervyn King said the bank won’t need to offer “vast sums” in compensation to build up its regulatory staff as it’s given new powers to oversee the financial system. King made the remarks as he answered questions on the government’s proposals to enact the most sweeping reforms to banking regulation since 1997. They include abolishing the Financial Services Authority and returning to the central bank duties to supervise lenders. (Bloomberg)

EU: Europe’s debt crisis deepens amid speculation Papandreou to quit
Europe’s financial turmoil deepened, dominating a Group of 20 summit amid speculation Greek Prime Minister George Papandreou will quit after his call for a referendum on an international rescue split his party and cut off aid. Papandreou, whose term runs to 2013, will step down today and propose a coalition government headed by former European Central Bank Vice President Lucas Papademos. The uproar came less than 24 hours after the leaders of Germany and France turned the referendum on a week-old bailout package into a vote on whether Greece stayed in the euro area, cutting off assistance in the meantime. (Bloomberg)

E.U: ECB unexpectedly cuts rate as Draghi rules out debt backstop. The European Central Bank unexpectedly cut interest rates at Mario Draghi's first meeting in charge even as the new president signaled no plans to backstop the region's most vulnerable nations as the escalating debt crisis threatens to splinter the euro region. "What makes you think that becoming the lender of last resort for governments is what you need to keep the euro region together?" Draghi asked reporters in Frankfurt. "That is not really in the remit of the ECB. The remit of the ECB is maintaining price stability in the medium term." (Source: Bloomberg)

European Central Bank President Mario Draghi said that  Europe is  heading towards a “mild recession.” (Bloomberg)  

US: Consumers are most pessimistic on economy since recession
Consumer confidence declined last week to its lowest level since the depths of the recession in the first quarter of 2009. The Bloomberg Consumer Comfort Index fell to minus 53.2 in the week ended 30 Oct, the second-lowest reading in almost 26 years of data, from minus 51.1. The gauge has held below minus 50 for six of the past seven weeks, a period unmatched even during the 2008-2009 economic slump. Unemployment around or above 9% for the last 30 months, stagnating incomes and falling home values may limit the pace of household spending into 2012. (Bloomberg)

US stocks rally after ECB cut as Greece moves toward bailout
US stocks advanced, sending the Standard & Poor’s 500 Index higher for a second straight day, as Greece moved closer to accepting a bailout and the European Central Bank unexpectedly lowered interest rates. Qualcomm jumped 7.5% as the biggest maker of mobile-phone chips forecast sales that beat analysts’ projections. Kraft Foods added 3.3%t after raising its earnings estimate. Estee Lauder jumped 18% after the maker of Clinique skin care raised its profit forecast, boosted its dividend and set plans for a stock split. The S&P 500 climbed 1.9% to 1,261.15 at 4 pm in New York, extending its two-day gain to 3.5% and erasing its 2011 decline. The Dow Jones Industrial Average rose 208.43 points, or 1.8%, to 12,044.47. (Bloomberg)

U.S: Service industries cool, sentiment declines supporting Federal Reserve Chairman Ben S. Bernanke's forecast that the economic recovery will be "frustratingly slow." A gauge of non-manufacturing industries making up about 90 %of the economy fell to 52.9 in October from 53 in September. (Source: Bloomberg)

U.S: Orders to factories unexpectedly increased in September. Bookings climbed 0.3% MoM after a revised 0.1% MoM gain in August that was initially estimated as a drop, figures from the Commerce Department showed. (Source: Bloomberg)

U.S: Jobless claims fell to a one-month low last week. Jobless claims fell by 9,000 to 397,000 in the week ended Oct. 29, the fewest in a month, Labor Department figures showed. The total number of people on unemployment benefits rolls decreased to a six-month low. (Source: Bloomberg)


US worker productivity rose in 3Q for the first time this year as companies  tried to cut costs following a slowdown in growth. The measure of employee  output per hour increased at a 3.1% annual rate, following declines in each of  the previous two quarters, figures from the Labor Department showed.  (Bloomberg)

US unit labor costs in nonfarm businesses fell 2.4% in 3Q11. Unit labor costs  rose 1.2% over the last four quarters, because the increase in hourly  compensation was greater than the increase in output per hour. (Bloomberg)

US initial jobless claims totaled 397,000 in the week ended 29 Oct (406,000  in the prior week), the Labor Department reported. Economists estimated a  reading of 401,000. The number of  continuing unemployment benefit  claims fell 15,000 to 3,683,000 in the week ended 22 Oct. (AFP, WSJ)

The  US Institute for Supply Management’s index of  non-manufacturing businesses eased to 52.9 in Oct (53 in Sep). Economists  projected a reading of  53.5. (Bloomberg)

The number of Americans living in neighborhoods beset by extreme poverty surged in the last decade, erasing the progress of the 1990s, with the poorest  areas growing more than twice as fast in suburbs as in cities. At least 2.2m more  Americans, a 33% jump since 2000, live in neighborhoods where the poverty  rate is 40% or higher, according to a study released by the Brookings Institution.  (Bloomberg)