Malaysia’s industrial production growth slowed in September as a decline in mining output countered gains in manufacturing. Production at factories, utilities and mines gained 2.5% from a year earlier after rising a revised 3.7% in August, the statistics department said in a statement yesterday. Malaysia’s exports grew at the fastest pace in more than a year in September on higher sales of electronics and commodities, an acceleration that may be short-lived as Europe’s debt crisis and a faltering US recovery hurts orders. (Bloomberg)
PM Datuk Seri Najib Tun Razak yesterday announced the ninth Economic Transformation Programme (ETP) progress update which consists of 13 projects, nine new and four recapped, with total investment value of RM5.85bn. All 13 projects were expected to contribute RM8.68bn to GNI and create an estimated 16,902 jobs. With these new projects, the ETP has recorded RM177.1bn in commitment investment, RM237.23bn in projected GNI and 389,263 potential new jobs. The nine new projects are: IBM will invest RM1bn in its Global Technology Services Centre in Cyberjaya over the next five years. Toshiba will relocate its regional operational headquarters to Malaysia with an investment of RM268m. Akamai Technologies will collaborate with Telekom Malaysia on the Netstorage project, involving an investment value of RM390,000. KPJ Healthcare Bhd will build five hospitals over the next three years with an investment of RM763m. IOI Corp will invest RM130m on a new oleochemicals facility by 2013. Agilient Technologies will build a test and measurement hub with investment value of RM212m. Google Inc is spearheading the „Get Malaysian Business Online‟ (GMBO) initiative. The Pengagau Group will invest RM67.7m to strengthen its integrated cage farming. Exotic Star S/B will invest RM80.31m in a modern one-stop centre for fruit packaging and processing. (Bernama, BT, Pemandu)
Manufacturing sales rose by 16.5% yoy to RM50.8bn in Sep (+11.2% to RM50bn in Aug). On a mom basis, it increased by 1.6% (+0.6% in Aug). For 9M11, the sales up 11.3% to RM441.2bn. Total employees engaged in the manufacturing sector rose 2.5% yoy to 1.011m persons (+2.6% to 1.013m persons). Salaries & wages paid in Sep increased 7.6% yoy to RM2.36bn (+5% to RM2.31bn). Average salaries & wages paid per employee soared 5% yoy to RM2,332 in Sept (+2.4% to RM2,282 in Aug). Productivity grew by 13.7% yoy to RM50,262 (+8.4% to RM49,407 in Aug). (Department of Statistics)
Small and Medium Enterprise Corp Malaysia (SME Corp) is working closely with Bank Negara Malaysia and the Association of Banks in Malaysia (ABM), to promote the 1-Innovation Certification for Enterprise Rating & Transformation (1-InnoCERT) programme. Its chairman Datuk Ir Mohamed Al Amin Abdul Majid said the effort would facilitate linkages between innovative SMEs and banks. To date, more than 400 SMEs had undertaken the online assessment and of these, 97 had been 1-InnoCERT certified, he noted. SME Corp will also organise five awareness workshops from 1o Nov 11 to 18 Feb 12, to guide interested SMEs on the application process. (Bernama)
Malaysians have been invited to venture into Chile's mining sector which is offering huge business opportunities. International Vice Director, Exports Promotion Bureau, Government of Chile Carlos Honorato Comandari said the projects in the mining sector in Chile from now until 2016 were worth US$70bn or about 40% of the US$200bn worth of projects in the Latin American countries. "These projects will also offer businesses and employment opportunities in the services sector," he said. (Bernama)
A marked increase in trade between Malaysia and Chile is expected when the Malaysia-Chile Free Trade Agreement (MCFTA) comes into force in early 2012, said Deputy Minister of International Trade and Industry, Datuk Mukhriz Mahathir. Mukhriz sees an increase in Malaysia's export of electrical and electronic (E&E) products and components to Chile which is currently very small. He also said that Malaysians should explore opportunities in oil and gas as well as palm oil. Malaysia's trade with Chile has been on an uptrend since 2002, with the trade value increasing from US$75.23m in 2002 to US$313.23m in 2010. In the first nine months of this year, it increased by a further 10%. (Bernama)
Indonesia: Unexpectedly cuts rate to record low to aid growth
Indonesia unexpectedly cut interest rates by half a percentage point to a record low to shield the economy from a faltering global recovery. The IDR weakened. Bank Indonesia lowered the reference rate to 6%, it said in a statement yesterday. The world’s fourth-most populous nation joins countries from Brazil to Australia in lowering borrowing costs to boost spending at home, as Europe’s debt crisis and elevated US unemployment threaten exports. Indonesian inflation eased to 4.42% last month, the slowest pace in more than a year, encouraging officials to add to October’s quarter-point rate cut. (Bloomberg)
China: Export growth at 2-year low as Europe clouds outlook
China’s exports rose at the slowest pace in almost two years in October as Europe’s deepening debt crisis crimped demand, adding pressure on policy makers to support growth in the world’s second-biggest economy. Overseas shipments rose 15.9% from a year earlier, customs bureau data showed yesterday. The trade surplus was USD17bn. Imports climbed a more-than-forecast at 28.7%. (Bloomberg)
Philippine exports fell for the fifth straight month in Sep, contracting by 27.4% yoy (-13.7% in Aug) to US$3.88bn. Economists expected a decline of 19.3% yoy. (WSJ)
China’s exports rose 15.9% yoy in Oct (+13.1% in Sep) while imports rose 28.7% (+20.9% in Sep). The trade surplus was US$17.03bn, up from US$14.51bn. The market was expecting exports and imports to grow 16.1% and 22.2% respectively. (Bloomberg)
Thailand’s consumer confidence index fell from 72.2 in Sep to 62.8 in Oct. (Bloomberg)
Japan’s machinery orders, an indicator of future capital spending, fell 8.2% mom in Sep (+11% in Aug), the Cabinet Office said. Economists expected a 7.1% fall. (Bloomberg)
Japan's consumer confidence index was 38.6 in Oct, unchanged from Sep. A reading below 50 suggests consumer pessimism. Economists expected a reading of 39.0. (Reuters)
European efforts to speed the setup of a permanent rescue fund have lost momentum amid a clash between Germany and France over provisions to force bondholders to share losses, three people involved in the negotiations said. Finance ministers failed to bridge divisions this week over the European Stability Mechanism, lessening the chances of activating its €500bn (US$680bn) war chest next Jul, said the people, who declined to be identified because the talks are in progress. Officials had hoped to bring the ESM‟s start date forward to mid-2012 from its ultimate deadline of Jul 2013, the people said. (Bloomberg)
An increase in power tariffs in India is inevitable given the sharp rise in coal prices, which have risen more than 20% yoy, the head of India's central electricity regulatory commission told reporters on Thursday. (Reuters)
EU: The new Greek government led by Papademos will seek to avoid collapse
The new Greek unity government led by Lucas Papademos, former vice president of the European Central Bank, will face the task of securing funds to avert the country’s economic collapse. President Karolos Papoulias gave Papademos the mandate to form a government after receiving proposals from PM George Papandreou, Antonis Samaras, leader of the opposition New Democracy party, and opposition LAOS party leader George Karatzaferis, according to a statement from the president’s office in Athens. The new government will be sworn in today at 2pm local time. Papademos’s appointment ended four days of wrangling between Papandreou and other party leaders. (Bloomberg)
EU: Italy sells maximum amount at 1-year bill sale as yield surges
Italy sold EUR5bn (USD6.8bn) of one-year bills, the maximum for the auction, and demand rose as the Treasury lured investors with the highest yield in 14 years after debt-crisis contagion sent borrowing costs to records. The Rome-based Treasury sold the bills to yield 6.087%, the highest since September 1997 and up from 3.57% at the last auction on 11 Oct. Demand was 1.99x the amount on offer, compared with 1.88x last month. The yield on Italy’s benchmark 10-year bond fell below 7% after the auction from a euro-era record 7.45%. (Bloomberg)
EU: Lowers Euro-region growth forecasts on worsening crisis
The European Commission cut its euro-region growth forecast for next year by more than half and said it sees the risk of a recession as leaders struggle to contain the fiscal crisis. GDP may grow 1.5% this year and 0.5% in 2012, the Brussels-based commission said yesterday. It had earlier projected the 17-member region to expand 1.6% and 1.8% this year and next, respectively. (Bloomberg)
UK: BOE keeps bond-purchase target on hold at GBP275bn
The Bank of England maintained its target for asset purchases as policy makers gauged the capacity of their second round of stimulus to ward off the danger posed by Europe’s debt crisis. The nine-member Monetary Policy Committee led by Governor Mervyn King held the ceiling for so-called quantitative easing (QE) at GBP275bn (USD438Bn). The bank, which expanded QE by GBP75bn last month, said the current purchases will take another three months to complete and the “scale of the programme will be kept under review.” (Bloomberg)
US: Trade deficit, claims show improving growth
The US trade deficit unexpectedly narrowed in September on record exports and jobless claims fell to a seven-month low, indicating the world’s largest economy may be poised to strengthen. The trade shortfall shrank 4% to USD43.1bn from a revised USD44.9bn in August that was smaller than initially reported, the Commerce Department said. First-time applications for unemployment benefits declined by 10k to 390k last week, the Labor Department said. (Bloomberg)
US stocks rise on jobless claims drop as Europe concern eases
US stocks advanced, rebounding from yesterday’s tumble, as jobless claims declined while a retreat in Italian bond yields and the selection of a new Greek premier tempered concern about Europe’s debt crisis. The S&P 500 added 0.9% to 1,239.70 pts. The benchmark gauge for American equities lost 3.7% yesterday as one out of 500 stocks in the index gained, the fewest since June 2010. The Dow Jones Industrial Average advanced 112.92 pts, or 1%, to 11,893.86. (Bloomberg)
US imported goods price index declined 0.6% mom in Oct (no change in Sep), Labor Department figures showed. Economists projected the gauge would also be unchanged in Oct. (Bloomberg)
US initial jobless claims fell 10,000 to a seasonally adjusted 390k in the week ended 5 Nov (400k in the prior week). Economists expected the reading to be slightly below 400k. US continuing claims fell 92k in the week ended 29 Oct to 3.615m. (Reuters)
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