Malaysia’s approved factory investment rose in 2011 as an expanding economy prompted companies including Agilent Technologies Inc. and Infineon Technologies AG to increase spending. Approved investments rose 18.8% to RM56.1bn (USD18.6bn) last year, Malaysia’s International Trade and Industry Minister Mustapa Mohamed said in Kuala Lumpur yesterday. That compares with RM47.2bn in 2010. Approved foreign investment in manufacturing climbed to RM34.2bn last year from the RM29.1bn reported previously for 2010. (Bloomberg)
Malaysia's realised private investments this year are expected to increase to RM110bn from about RM94bn in 2011, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said. "Based on progress achieved so far and projects to be implemented, we're confident that the targeted amount will be achieved. A large chunk of the investment, about 40% of it, come from oil and gas sector," he said. (Bernama)
Total investments approved in the manufacturing, services and primary sectors last year surged by 40.7% from RM105.6bn (4,368 projects) in 2010 to reach RM148.6bn (4,964 projects) in 2011. They are expected to create about 149,496 employment opportunities. Domestic investments in 2011 continued to exceed foreign direct investments (FDI), accounting for RM82.3bn or 55.4% of the total approved investments, while foreign investments totalled RM66.3bn or 44.6%. Sarawak attracted the highest amount of approved investments at RM14.4bn, followed by Penang (RM14bn), Sabah (RM13.7bn) and Selangor (RM13.5bn). (Bernama, Malaysian Insider)
Malaysia’s foreign direct investment (FDI) inflows increased 12.3% to RM32.9bn in 2011 from RM29.3bn in 2010, and the government expects to maintain a similar growth rate this year despite concerns over the global economy. International Trade and Industry Minister Datuk Seri Mustapa Mohamed emphasized that most of Malaysia’s FDI was derived from within Asia. The manufacturing sector accounted for the largest share of FDI inflows, comprising 50.1%, followed by the services sector with 27.3% and mining and quarrying at 22.2%, he said. (Financial Daily, Starbiz)
Approved manufacturing investment had yet to recover to pre-crisis levels, despite growing 18.9% to RM56.1bn in 2011 (RM47.2bn in 2010), as it was still well below the RM62.8bn recorded in 2008, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said. Penang attracted the highest levels of approved manufacturing investment at RM9.1bn, followed by Selangor (RM8.7bn), Sarawak (RM8.5bn), Johor (RM6.6bn) and Kedah (RM6.1bn). (Malaysian Insider)
Singapore: House prices to drop in next 6 months
PropertyGuru, Singapore’s leading property site, revealed its 4Q11 survey results on the property market sentiment in Singapore. The survey indicates that home buyers and investors expect the new government measures to lower the cost of property, compared to 3Q11. Largely due to the impact of the ABSD (Additional Buyer’s Stamp Duty), 52% believe that property prices will decrease in the next six months. The government has imposed an ABSD for private property of between 3% and 10% for Singaporeans, Permanent Residents and foreigners to moderate investment demand for private residential property and promote a more stable and sustainable market since 8 Dec 2011. (StarBiz)
Indonesia’s government plans to raise 2012 budget deficit from Rp124tr or 1.53% of GDP in the revision of its budget, with plenty of fiscal movement room. (Indonesia Finance Today)
Indonesia’s government will consider raising subsidized fuel oil price if oil price moves above US$115 per barrel. (Indonesia Finance Today)
Indian annual consumer price inflation touched 7.65% yoy in Jan, higher than wholesale inflation of 6.55% yoy, but still suggesting price pressures are moderating, adding weight to views that the central bank has room to cut interest rates. (Reuters)
China: Junk bonds surge to best of BRICs on policy easing
Dollar-denominated junk bonds sold by Chinese companies are handing investors the third-best returns in global high-yield markets this year as policy makers loosen credit restrictions to support growth. The notes gained 11% through 20 Feb, the best performance among so-called BRIC economies and trailing only speculative-grade corporate debt from Norway and Venezuela among 33 economies tracked in Bank of America Merrill Lynch indexes. China’s central bank is relaxing lenders’ reserve requirements and injecting cash into the financial system to spur borrowing, which expanded in the 4Q at the slowest pace since 2009. (Bloomberg)
Japan’s all industry activity index rose 1.3% mom in Dec (-1% in Nov). (Bloomberg)
South Korea ran a trade deficit of US$3.86bn for the year to 20 Feb as exports barely grew while imports jumped, Korea Customs Service data showed, hit by the euro zone crisis and rising raw materials prices. (Reuters)
South Korea and the US have agreed that their long-delayed free trade agreement will take effect on 15 Mar, Seoul's trade ministry said. (AFP)
Australia: Central Bank sees scope for further rate cuts
Australia’s central bank said it has scope to ease monetary policy if needed, after keeping the benchmark interest rate unchanged this month as risks in Europe abated, minutes of its 7 Feb meeting showed. Policy makers “judged that if demand conditions were to weaken materially, the inflation outlook would provide scope for a further easing in monetary policy,” the minutes released today by the Sydney-based Reserve Bank of Australia showed. “While the financial situation in Europe remained fragile, the likelihood of an extremely bad outcome seemed to have diminished somewhat.” (Bloomberg)
EU: Central Banks said to swap Greek portfolio bonds
Euro-area central banks will swap the Greek bonds in their investment portfolios for similar securities to avoid enforced losses during a debt restructuring, a euro-area official said. The swap will happen today and is identical to one the European Central Bank carried out last week with the Greek bonds acquired in its asset-purchase programme, the official said. The new Greek bonds will be immune to collective action clauses, or CACs, ensuring central banks do not incur any losses when a private-sector debt write-down takes place, the official said on condition of anonymity. A spokesman for the Frankfurt-based ECB declined to comment. (Bloomberg)
EU: Ministers reach agreement on second Greek bailout package
Euro-area finance ministers reached agreement on a second bailout package for Greece that is vital to staving off a default next month. The deal includes a 53.5% or EUR200bn writedown for investors in Greek bonds, Luxembourg’s Jean-Claude Juncker, who led the meeting, told reporters early yesterday morning. Debt-swap bonds will have a coupon of 2% in 2014, rising to 3% in 2015–2020 and to 4.3% after that, he said. Finance ministers haggled into the night in Brussels over the terms of new loans to Greece and a possible contribution by central banks, and leaned on investors to accept bigger write-offs in a bond exchange. Ministers were discussing a Greek debt target of 121% of gross domestic product by 2020. (Bloomberg)
The European Commission’s preliminary estimate of consumer confidence rose to -20.2 in Feb from -20.7 in Jan, the second consecutive month of strengthening confidence and is in line with economists’ expectations. However, consumer confidence remains weak by historic standards, and below the long-term average of -12.7. (WSJ)
Euro-area central banks will swap Greek bonds in their investment portfolios for similar securities to avoid enforced losses during a debt restructuring, a euro-area official said. The swap is identical to one the European Central Bank carried out last week with the Greek bonds acquired in its asset-purchase program, where the new Greek bonds will be immune to collective action clauses, ensuring central banks do not incur any losses when a private-sector debt write-down takes place. (Bloomberg)
Greece hurried to finalise legislation tied to a huge eurozone bailout, with officials warning tough reforms mean a heavy workload and controversial constitutional changes. "We have only a few days ahead of us until the European Union summit (on 1-2 Mar) ... and we must do a lot of things in these few days. We must complete all the prior actions," Finance Minister Evangelos Venizelos said, asserting that "Greece is and will remain a eurozone member no matter what happens." (AFP)
US: Obama’s Treasury said to detail corporate tax plan tomorrow
The Obama administration will release details tomorrow on its proposal to reduce the 35% corporate tax rate and eliminate tax breaks, said administration officials familiar with the plan. The Treasury Department will outline the proposal, according to the officials, who briefed reporters on condition of anonymity. They didn’t discuss details of the administration’s proposal. Treasury Secretary Timothy F. Geithner said 15 Feb during congressional testimony that the administration would release a proposal that is “more than principles but less than fully articulated legislative language.” (Bloomberg)
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