20111214 1010 Global Economic Related News.

The  eurozone crisis has not affected the Malaysian economy, said  Second  Finance Minister, Datuk Seri Ahmad Husni Hanadziah. He said the  country was on track to achieve  next year’s economic growth target  between 5% and 6% despite the global economic uncertainty. “ In terms of  our position, we are now focusing on domestic demand such as investment,  which we are doing well currently.”  Ahmad Husni said for this year, Malaysia would be able to achieve the  projected 5% growth rate, given that a lot of the government projects  had been kicked-off in the first half of this year.” (Bernama)

The government aims to create a more competitive environment for the private  sector to thrive through  greater liberalization and deregulation, said  Deputy Prime Minister Tan Sri Muhyiddin Yassin. He said in order to  make the private sector the new engine of growth, businesses need open,  transparent and even-handed economic stewardship. (Bernama)

Japan's tertiary industry index rose 0.6% to 98.7 in Oct (-0.4% in Sep and  +0.1% in Aug). The level remained below the pre-disaster level of 99.3 marked  in Feb. Economists forecast a +0.4% reading. (MNI) 

Hong Kong's  index of industrial production rose by 0.2% yoy in 3Q  (+2.0% in 2Q), the Census and Statistics department said. (Reuters, HK Census  and Statistics department) 

Fitch Ratings said  China faces slower growth in  home sales and  construction next year as top officials meet to map out economic policies.  Lending to developers will remain tightly controlled as the government prolongs  a campaign to stabilize property prices, Fitch said. (Bloomberg) 

China‟s trade restrictions and “interventionist policies” in areas such as  intellectual property rights remain a concern for American companies doing  business in the Asian nation, the US said. China discriminates against foreign  business in “numerous sectors” of the economy, the US Trade Representative‟s  office said in its annual report on Chinese compliance with World Trade  Organization rules. Continued government intervention in its economy has been  a “troubling trend,” the US said. (Bloomberg) 

Philippine exports declined 14.6% yoy to US$4.09bn in Oct (-27% in Sep),  the National Statistics Office said. Economists called for a 16.5% drop.  (Bloomberg) The Philippines needs sustained macroeconomic stability, additional revenues  and increased government spending if it is to equal emerging market peers,  according to the International Monetary Fund (IMF). Periods of growth were  not sustained given the absence of strong and persistent economic reforms, according to an IMF Working Paper titled “The Determinants of Economic  Growth in the Philippines: A New Look.” (Businessworld Online) 

Vietnam's  trade deficit was US$567m in Nov, sharply lower than an initial  estimate of US$700m, following price increases for key export items such as  crude oil, rice, and coffee, the customs department said. Exports in Nov were revised up to US$8.85bn from an earlier estimate of US$8.6bn, while imports  were raised to US$9.42bn, from US$9.3bn earlier, according to a report from  the Finance Ministry-run customs department. (Reuters) 

Exports in  the Philippines fell 14.6% yoy (-27.0% in Sep) to US$4.09bn,  versus consensus expectations of a 16.5% drop. (Bloomberg) 

Money supply growth in the Philippines moderated to 6.9% yoy from 7.4%  in Sep. Bank lending rose to 21.1% yoy (18.9% in Sep), while bank lending net of  RRPs rose 22.2% (21.7% in Sep). (Bloomberg) 

Global staffing services company Manpower said job seekers in 30 of 41  countries and territories can expect a  slower pace of hiring in 1Q12 than in  4Q11.  The index in Singapore fell to 16% from 31%  The index in India increased to 41% from 34%  The index in Singapore fell to 17% from 25% (Bloomberg, Reuters) 

In Indonesia, total local auto sales fell 2.3% yoy to 67,656 units in Nov, and  21.6% mom compared with 86,345 units in Oct. (Bloomberg, Reuters) Total Indonesian motorcycle sales fell to 642,126 units in Nov from 715,176  units in Oct. (Bloomberg) 

Indonesia: Poised to pass land law, bolstering growth prospects

Indonesia’s parliament may approve this week a land-acquisition law that will allow the government to accelerate road, port and airport projects, bolstering President Susilo Bambang Yudhoyono’s efforts to boost growth. Lawmakers will probably approve the bill on 16 Dec, Taufik Hidayat, vice chairman of the Land Procurement Parliamentary Special Committee, said in a telephone interview. After Yudhoyono signs it into law, the government will be empowered to take over land for development while owners will be guaranteed adequate compensation, he said. (Bloomberg)

India: Biggest borrowers sending deals to four-year low
Indian corporate bond sales fell to the lowest level for December since 2007 as company treasurers delayed new offerings until the central bank confirms it’s finished raising interest rates. A drop in borrowing costs would make it cheaper for companies to raise funds for the USD1trn of road and power projects needed to support the expansion of Asia’s third-largest economy. The extra yield investors seek to hold top-rated Indian company notes over government debt declined from a seven-week high reached on 8 Dec, while the comparable spread in China widened. (Bloomberg)

UK: Inflation slowed in November on food, transport costs
UK inflation slowed for a second month in November, held down by food and transport prices as the prospect of another recession weighed on the economy. Bank of England officials expect inflation to drop “sharply” toward the 2% target next year and have indicated the risks from the euro-area crisis may prompt another increase in stimulus in February. The Organization for Economic Cooperation and Development has said the economy may already be shrinking. (Bloomberg)

Portugal: Portugal may nationalize banks in historic irony
Portugal’s government may have to partly nationalize crisis-hit banks, even as it sells assets as part of the EUR78bn (USD102.8bn) bailout agreement. Portuguese lenders’ stock-market value has tumbled to historic lows amid Europe’s deepening sovereign crisis and requirements for banks to bolster capital and mark to market the prices of euro-region debt holdings. The nation’s three biggest banks have lost a combined EUR6.3bn, or 68%, of market value this year, while Portugal’s 10-year bond yield almost doubled to 13%. (Bloomberg)

Eurozone: EU banks selling ‘crown jewels’ risks undermining growth
European banks, under pressure from regulators to bolster capital, are selling some of their fastest-growing businesses to competitors from outside the region. Spain’s Banco Santander SA, Belgium’s KBC Groep NV and Germany’s Deutsche Bank AG are accelerating plans to exit profitable operations outside their home markets. Santander, which said in October it needs to plug a EUR5.2bn (USD6.9bn) capital gap, sold its Colombian unit last week to Chile’s Corpbanca for USD1.16bn. Deutsche Bank is weighing options including a sale of most of its asset-management unit, while KBC may dispose of businesses in Poland. (Bloomberg)

Eurozone: Fifth European solution failing to ease stress
The fifth agreement in 19 months intended to resolve Europe’s sovereign crisis is failing to ease stress in the debt markets. European leaders at last week’s summit in Brussels stopped short of providing the comprehensive solution that investors have sought and didn’t receive unanimous support for the measures they did take. Meetings in May 2010 that led to the creation of the European Financial Stability Facility and deals to expand the bailout fund in March, July and October failed to stop the rot spreading from Greece. (Bloomberg)

US: Treasuries gain on auction demand, Fed refraining from action
Treasuries rose after the Federal Reserve refrained from taking new actions to boost growth and the refuge appeal of US debt boosted demand to the highest since April 2010 at yesterday’s USD21bn 10-year note auction. Yields on current 10-year notes reached a two-week low after the sale’s bid-to-cover ratio, which gauges demand by comparing total bids with the amount offered, reached 3.53, the strongest level in 20 months. Concern than Europe’s sovereign-debt crisis is far from a resolution damped risk appetite. (Bloomberg)

US: Retail sales rose at slower pace in November
Retail sales rose in November at the slowest pace in five months, indicating American consumers were trying to live within their means heading into the holiday shopping season as wages dropped. The 0.2% gain in purchases fell short of the 0.6% median forecast of economists surveyed by Bloomberg News and followed increases in the prior two months that were larger than previously estimated, according to data from the Commerce Department in Washington. Other reports showed inventories climbed in October and job openings fell. (Bloomberg)


The  Fed left unchanged its statement that economic conditions are likely to  warrant “exceptionally low” interest rates “at least through mid 2013.” The  central bank maintained its target overnight interest rate at a range of zero  to 0.25%. (Bloomberg)

The  US government budget deficit fell 9% to US$137.30bn in Nov 11  (US$150.39bn in Nov 10), the Treasury Department reported. Economists had  forecast a US$139bn gap. (Reuters)

There were 3.3m  US job openings on the last business day of Oct, little  changed from 3.4m in Sep. (US Bureau of Labor Statistics)