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Malaysia
YTL Cement (YTLC MK, Buy, TP: RM4.50) was granted more time to complete its proposed issue of up to US$200m rd (RM718.6m) exchangeable bonds, marking the 3 time the company was given a time extension. YTLC told Bursa Malaysia yesterday it had on March 20, 2009 made an application to the Securities Commission (SC) for an extension of time up to October 4, 2009 to complete the proposed exercise. The group said that it needs the bonds issuance to raise funds to finance future investments and projects. (Malaysian Reserve)
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Proton Holdings Bhd said it is in preliminary discussions with Renault SA and General Motors Corp regarding a new technical alliance to make new models. Proton had ended partnership talks with Volkswagen AG in 2007. According to Proton’s managing director, Datuk Syed Zainal Abidin Syed Mohamad Tahir, the alliance is “vital” in achieving economies of scale. An alliance with a foreign car maker may also build other models which could be sold jointly in overseas markets. Proton is focusing on Middle East, China, India, and Southeast Asia to reduce its dependence on domestic sales. In addition, Proton needs a partner to develop a new version of its Perdana luxury sedan by 2010. (Financial Daily)
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Bank Negara Malaysia’s (BNM) international reserves rose to RM320.7bn on March 31 this year from RM314bn as at March 13 2009. In a statement yesterday, BNM said the reserves position was sufficient to finance 7.9 months of retained imports and was 4x the short-term external debt. The latest reserves level accounted the quarterly adjustment for the foreign exchange revaluation gain following the strengthening of some of the major currencies against the RM during the quarter (Malaysian Reserve)
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Malaysia’s crude palm oil (CPO) inventories in March are likely to lower to 1.5m tonnes compared to 1.56m tonnes in February as planters have embarked on their replanting plan on their plantation estates. Plantation Industries and Commodities Minster Datuk Peter Chin said the government had approved oil palm replanting on some 106,330 hectares. Under the replanting scheme announced late last year, the government has targeted some 200,00ha of land for replanting. Planters who carried out replanting would receive RM1k per ha of plantation land cleared for new plantings. (Financial Daily)
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Industrial production, which took a sharp 20.2% fall in January, is likely to see milder contraction in February. Economists expect the industrial production index (IPI) to improve following the better showing of exports in February, and last year' base effects due to the Chinese New Year festivities. The Statistics Department will release the data tomorrow. (BT)
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Barisan retained the Batang Ai state seat, which it won in 2006 elections while Pakatan coalition members PAS and PKR regained the Bukit Gantang parliamentary seat and Bukit Selambau state seats respectively which they won in the 2008 general election. (The Star)
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INVESTMENT RESEARCH
Global
Stocks fell Tuesday, retreating for a second straight session after a four-week advance, on worries about banks and autos and the start of the quarterly reporting period. The Dow Jones industrial average lost 2.3% (-186.3 pts, close 7,789.6). The Standard & Poor' 500 index lost 2.4% (-19.9 pts, close 815.6) and the Nasdaq composite lost 2.8% (-45.1 pts, close 1,561.6). In currency trading, the dollar gained versus the euro and the yen. U.S. light crude oil for May delivery fell US$1.90 to settle at US$49.15 a barrel on the New York Mercantile Exchange. (CNNMoney)
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The pace of borrowing by U.S. consumers fell in February as fewer Americans sought credit to make purchases amid what may become the worst recession in seven decades. Consumer credit fell by US$7.48bn, or 3.5% at an annual rate, to US$2.56trn, the Federal Reserve said yesterday. Credit increased by US$8.14bn in January, more than previously estimated. The Fed’s report doesn’t cover borrowing secured by real estate. Demand for credit in the U.S. probably shrank further in March, the fourth straight month job losses exceeded 650,000, as unemployment climbed and banks remained reluctant to extend affordable loans. Economists had forecast consumer credit would drop US$3bn in February, according to the median of 32 estimates in a Bloomberg News survey. (Bloomberg)
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Europe’s recession deepened more than estimated in 4Q08 after companies scaled back production and consumer spending declined. Gross domestic product in the euro region fell 1.6% from the previous three months, the most in at least 13 years, the European Union’s statistics office in Luxembourg said yesterday, revising a March 5 estimate of a 1.5% contraction. Investment plunged 4%, also more than estimated, and household spending fell 0.3%. The economy, which grew 0.8% in 2008, may shrink 4.1% this year, the Organization for Economic Cooperation and Development has forecast. The European Central Bank is examining new non-standard measures to stimulate the economy after cutting interest rates to a record low. (Bloomberg)
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U.K. manufacturing dropped the most in at least four decades as the global economic slump throttled demand for goods from cars to ceramics. Production fell 6.5 percent in the three months through February, the most since records began in 1968, the Office for National Statistics said yesterday. Output declined 0.9% from January. Economists predicted a 1.5% drop, the median of 30 forecasts in a Bloomberg News survey showed. The slump in factory production was led by transport equipment, basic metals and non-metallic mineral products such as ceramics, the statistics office said. While the monthly drop was the smallest in six months, the annual decline of 13.8% was the largest since 1981. (Bloomberg)
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U.K service industry sales declined at a slower pace in 1Q09 in a sign the recession may be starting to ease, the British Chambers of Commerce said. The net balance of services companies saying orders deteriorated was minus 23, compared with minus 31 in 4Q08, the London-based lobby group said. A gauge of factory sales slumped to minus 55, the lowest since records began in 1989. The BCC conducted its survey of 6,500 companies from Feb. 23 to March 16. The lobby group forecasts the British economy may contract 3% or more this year as the global credit squeeze stifles trade and boosts unemployment. Bank of England policy makers may keep the benchmark interest rate at a record low of 0.5% this week as they buy assets with newly created money to boost economic growth. (Bloomberg)
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China’s stimulus plan may fuel the nation’s economic recovery this year, helping counter a global recession that is likely to drag growth in Asia’s developing countries to the weakest in 11 years, the World Bank said. Developing East Asia, which excludes Japan, Hong Kong, Taiwan, South Korea and Singapore, will expand 5.3% this year, less than a December estimate of 6.7%, the lender said in its semi-annual report yesterday. Growth was 8% last year, it said. China’s 4trn yuan (US$585bn) stimulus has already driven investment back to pre-crisis levels, fuelled rebounds in electricity and steel output, and restored consumer confidence, the lender said. Asian governments have unveiled more than US$700bn in spending, tax cuts and cash handouts, and the World Bank said countries like China and Thailand can afford more. China’s central bank Governor Zhou Xiaochuan has said leading economic indicators are pointing to a recovery in growth as the stimulus spending kicks in. Premier Wen Jiabao says it’s still “possible” to achieve the nation’s 8% growth target for 2009. (Bloomberg)
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Japan' central bank kept its benchmark interest rate steady yesterday but introduced new steps to spur lending and ease the strains of an increasingly painful recession. The Bank of Japan' eight-member policy board voted unanimously to leave the key overnight call rate target unchanged at 0.1%, as widely expected. With interest rates close to zero, the central bank has little room to tweak regular monetary policy and has instead focused on measures to boost corporate financing, which has shrivelled amid the global credit crisis. The central bank already buys commercial paper and corporate bonds to help shore up banks' balance sheets, but it acknowledged that "financial conditions have remained tight on the whole." In its latest move, the BOJ expanded the range of collateral it accepts in an effort to funnel more funds to commercial banks and subsequently, to companies seeking loans. The bank said it now welcomes "loans on deeds to municipal governments as eligible collateral." (StarBiz)
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Australia' central bank cut its key interest rate to the lowest level in almost 50 years yesterday, reinforcing fears the global financial crisis has dragged the country into recession. The cash rate was lowered by a quarter percentage point to 3% and since September has been slashed a total of four and a quarter percentage points. Economists had been divided about whether the Reserve Bank of Australia' board would cut the rate again at its monthly meeting. It left the rate unchanged last month. The cut comes after the latest official data showed gross domestic product shrank by 0.5% in 4Q08 and unemployment rose to its highest level in four years in February. Reserve Bank Governor Glenn Stevens said recent information showed the global recession continued from last year into 2009, and most assessments for the short term were gloomy despite huge government spending plans. Australia' economy is contracting at a slower rate than its trading partners and inflation is likely to fall as unemployment rises, so the rate cut "will provide significant support to domestic demand over the period ahead," he said. (StarBiz)
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YTL Cement (YTLC MK, Buy, TP: RM4.50) was granted more time to complete its proposed issue of up to US$200m rd (RM718.6m) exchangeable bonds, marking the 3 time the company was given a time extension. YTLC told Bursa Malaysia yesterday it had on March 20, 2009 made an application to the Securities Commission (SC) for an extension of time up to October 4, 2009 to complete the proposed exercise. The group said that it needs the bonds issuance to raise funds to finance future investments and projects. (Malaysian Reserve)
*****
Proton Holdings Bhd said it is in preliminary discussions with Renault SA and General Motors Corp regarding a new technical alliance to make new models. Proton had ended partnership talks with Volkswagen AG in 2007. According to Proton’s managing director, Datuk Syed Zainal Abidin Syed Mohamad Tahir, the alliance is “vital” in achieving economies of scale. An alliance with a foreign car maker may also build other models which could be sold jointly in overseas markets. Proton is focusing on Middle East, China, India, and Southeast Asia to reduce its dependence on domestic sales. In addition, Proton needs a partner to develop a new version of its Perdana luxury sedan by 2010. (Financial Daily)
*****
Bank Negara Malaysia’s (BNM) international reserves rose to RM320.7bn on March 31 this year from RM314bn as at March 13 2009. In a statement yesterday, BNM said the reserves position was sufficient to finance 7.9 months of retained imports and was 4x the short-term external debt. The latest reserves level accounted the quarterly adjustment for the foreign exchange revaluation gain following the strengthening of some of the major currencies against the RM during the quarter (Malaysian Reserve)
*****
Malaysia’s crude palm oil (CPO) inventories in March are likely to lower to 1.5m tonnes compared to 1.56m tonnes in February as planters have embarked on their replanting plan on their plantation estates. Plantation Industries and Commodities Minster Datuk Peter Chin said the government had approved oil palm replanting on some 106,330 hectares. Under the replanting scheme announced late last year, the government has targeted some 200,00ha of land for replanting. Planters who carried out replanting would receive RM1k per ha of plantation land cleared for new plantings. (Financial Daily)
*****
Industrial production, which took a sharp 20.2% fall in January, is likely to see milder contraction in February. Economists expect the industrial production index (IPI) to improve following the better showing of exports in February, and last year' base effects due to the Chinese New Year festivities. The Statistics Department will release the data tomorrow. (BT)
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Barisan retained the Batang Ai state seat, which it won in 2006 elections while Pakatan coalition members PAS and PKR regained the Bukit Gantang parliamentary seat and Bukit Selambau state seats respectively which they won in the 2008 general election. (The Star)
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INVESTMENT RESEARCH
Global
Stocks fell Tuesday, retreating for a second straight session after a four-week advance, on worries about banks and autos and the start of the quarterly reporting period. The Dow Jones industrial average lost 2.3% (-186.3 pts, close 7,789.6). The Standard & Poor' 500 index lost 2.4% (-19.9 pts, close 815.6) and the Nasdaq composite lost 2.8% (-45.1 pts, close 1,561.6). In currency trading, the dollar gained versus the euro and the yen. U.S. light crude oil for May delivery fell US$1.90 to settle at US$49.15 a barrel on the New York Mercantile Exchange. (CNNMoney)
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The pace of borrowing by U.S. consumers fell in February as fewer Americans sought credit to make purchases amid what may become the worst recession in seven decades. Consumer credit fell by US$7.48bn, or 3.5% at an annual rate, to US$2.56trn, the Federal Reserve said yesterday. Credit increased by US$8.14bn in January, more than previously estimated. The Fed’s report doesn’t cover borrowing secured by real estate. Demand for credit in the U.S. probably shrank further in March, the fourth straight month job losses exceeded 650,000, as unemployment climbed and banks remained reluctant to extend affordable loans. Economists had forecast consumer credit would drop US$3bn in February, according to the median of 32 estimates in a Bloomberg News survey. (Bloomberg)
*****
Europe’s recession deepened more than estimated in 4Q08 after companies scaled back production and consumer spending declined. Gross domestic product in the euro region fell 1.6% from the previous three months, the most in at least 13 years, the European Union’s statistics office in Luxembourg said yesterday, revising a March 5 estimate of a 1.5% contraction. Investment plunged 4%, also more than estimated, and household spending fell 0.3%. The economy, which grew 0.8% in 2008, may shrink 4.1% this year, the Organization for Economic Cooperation and Development has forecast. The European Central Bank is examining new non-standard measures to stimulate the economy after cutting interest rates to a record low. (Bloomberg)
*****
U.K. manufacturing dropped the most in at least four decades as the global economic slump throttled demand for goods from cars to ceramics. Production fell 6.5 percent in the three months through February, the most since records began in 1968, the Office for National Statistics said yesterday. Output declined 0.9% from January. Economists predicted a 1.5% drop, the median of 30 forecasts in a Bloomberg News survey showed. The slump in factory production was led by transport equipment, basic metals and non-metallic mineral products such as ceramics, the statistics office said. While the monthly drop was the smallest in six months, the annual decline of 13.8% was the largest since 1981. (Bloomberg)
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U.K service industry sales declined at a slower pace in 1Q09 in a sign the recession may be starting to ease, the British Chambers of Commerce said. The net balance of services companies saying orders deteriorated was minus 23, compared with minus 31 in 4Q08, the London-based lobby group said. A gauge of factory sales slumped to minus 55, the lowest since records began in 1989. The BCC conducted its survey of 6,500 companies from Feb. 23 to March 16. The lobby group forecasts the British economy may contract 3% or more this year as the global credit squeeze stifles trade and boosts unemployment. Bank of England policy makers may keep the benchmark interest rate at a record low of 0.5% this week as they buy assets with newly created money to boost economic growth. (Bloomberg)
*****
China’s stimulus plan may fuel the nation’s economic recovery this year, helping counter a global recession that is likely to drag growth in Asia’s developing countries to the weakest in 11 years, the World Bank said. Developing East Asia, which excludes Japan, Hong Kong, Taiwan, South Korea and Singapore, will expand 5.3% this year, less than a December estimate of 6.7%, the lender said in its semi-annual report yesterday. Growth was 8% last year, it said. China’s 4trn yuan (US$585bn) stimulus has already driven investment back to pre-crisis levels, fuelled rebounds in electricity and steel output, and restored consumer confidence, the lender said. Asian governments have unveiled more than US$700bn in spending, tax cuts and cash handouts, and the World Bank said countries like China and Thailand can afford more. China’s central bank Governor Zhou Xiaochuan has said leading economic indicators are pointing to a recovery in growth as the stimulus spending kicks in. Premier Wen Jiabao says it’s still “possible” to achieve the nation’s 8% growth target for 2009. (Bloomberg)
*****
Japan' central bank kept its benchmark interest rate steady yesterday but introduced new steps to spur lending and ease the strains of an increasingly painful recession. The Bank of Japan' eight-member policy board voted unanimously to leave the key overnight call rate target unchanged at 0.1%, as widely expected. With interest rates close to zero, the central bank has little room to tweak regular monetary policy and has instead focused on measures to boost corporate financing, which has shrivelled amid the global credit crisis. The central bank already buys commercial paper and corporate bonds to help shore up banks' balance sheets, but it acknowledged that "financial conditions have remained tight on the whole." In its latest move, the BOJ expanded the range of collateral it accepts in an effort to funnel more funds to commercial banks and subsequently, to companies seeking loans. The bank said it now welcomes "loans on deeds to municipal governments as eligible collateral." (StarBiz)
*****
Australia' central bank cut its key interest rate to the lowest level in almost 50 years yesterday, reinforcing fears the global financial crisis has dragged the country into recession. The cash rate was lowered by a quarter percentage point to 3% and since September has been slashed a total of four and a quarter percentage points. Economists had been divided about whether the Reserve Bank of Australia' board would cut the rate again at its monthly meeting. It left the rate unchanged last month. The cut comes after the latest official data showed gross domestic product shrank by 0.5% in 4Q08 and unemployment rose to its highest level in four years in February. Reserve Bank Governor Glenn Stevens said recent information showed the global recession continued from last year into 2009, and most assessments for the short term were gloomy despite huge government spending plans. Australia' economy is contracting at a slower rate than its trading partners and inflation is likely to fall as unemployment rises, so the rate cut "will provide significant support to domestic demand over the period ahead," he said. (StarBiz)
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