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Friday, December 30, 2011

Petrovietnam Produces 30 Per Cent Above Target

4 Safar 1433

HANOI, Dec 30,2011 - The Vietnam National Oil and Gas Group (PetroVietnam) produced 15 million tonnes of crude oil this year, 30 percent higher than production targets set earlier this year, Vietnam News Agency (VNA) reported.

The group exceeded the target despite lower output from some oil fields, which was compensated by technical innovations, which raised the extraction ratio up to 52 percent.

In the second half of the year, PetroVietnam has also begun tapping into two new oil fields and has increased oil production abroad.

Higher production has also helped the group realise its financial plan for the whole year, with total revenue of 672 trillion VND (US$32 billion), of which 170 trillion VND (US$2.8 billion) went into the State budget.

These figures indicate the group's income will account for half of the country's total income.

In terms of payment to the State, the group will constitute around 70 percent of corporate and group contributions.

PetroVietnam General Director Do Van Hau said the Government had assigned the group to produce 15.8 million tonnes of oil and 9 billion cu.m of gas in 2012.


Vietnam Moves Towards Cashless Society

4 Safar 1433

HANOI, Dec 30, 2011- Cash payments will make up less than 11 percent of all transactions in Vietnam by the end of 2015, down from the current 14 percent, according to a Government plan approved by Prime Minister Nguyen Tan Dung earlier this week.

The plan also targets to double the number of people with bank accounts to 40 percent of the population in the next four years, Vietnam News Agency (VNA) reported.

Cash payments constitute a global average of only 5-7 percent of transactions and the rate is even lower for the neighbouring economy of China, with 3-4 percent.

The world's leading non-cash payment market is the US, followed by the eurozone, while the developing economies are far behind, according to the World Payment's Report 2011.

The Government 2011-15 non-cash payment development plan was drafted by the State Bank of Vietnam with the aim of reducing cash-related costs and improving the efficiency of the country's banking system and State management.

Luc said non-cash payments (bank transfers, Internet banking, credit or debit cards) reduced cash-related risk from theft or fires, among other things.

Meanwhile, although the World Payment's Report stated that the global use of cash payments was endemic, especially for low-value retail transactions, it said cash was "costly to distribute, manage, handle and process" and that non-cash-payment growth would lower costs for banks and for the whole economic system.

Card payments services (credit and debit) will be the focus of Vietnam's 2011-15 payments reform and the country expects to have some 250,000 points of sale (POS) which accept some 200 million card payments a year by 2015.

Continuing the expansion of wage payments to bank accounts in State-owned enterprises and organisations, the Government will also encourage non-cash payments to pay for utility bills.


Wednesday, December 28, 2011

OSK 'Buy' Calls On TM, Axiata

4 Safar 1433

KUALA LUMPUR, Dec 29 ,2011 - OSK Research Sdn Bhd has maintained a 'buy' call on Axiata Group Bhd with a target price of RM5.60.

In a research statement Thursday, OSK said in the face of global economic uncertainties, the Axiata management has undertaken good strategic initiatives to keep operating cost lean.

"Axiata is also promoting sharing of infrastructure on the back of accelerating data usage, and it remains as an inexpensive regional mobile exposure," it said.

OSK said a major re-rating catalyst would come from a higher dividend payout.

Meanwhile, the research firm has rated Telekom Malaysia Bhd (TM) a 'buy' with target price of RM5.15.

It said TM's core earnings were expected to pick up in financial year 2012 as Unifi's footprint expanded to 1.3 million premises.

"We also gather from TM that Unifi's base rose above 200,000 at end-November 2011, beating the management's own expectations and our estimate," it said.

OSK said TM would also benefit from the ramp-up in wholesale contribution following the inking of High-Speed Broadband wholesale agreements with Maxis and P1 this year.

It said the stock remained one of its top picks for exposure to the telecommunications sector.

"Its foreign shareholding level rose 19 per cent at end-October, a level last seen in 2008, reflecting renewed optimism on the stock," it said.

 Source- BERNAMA

Strong Domestic Demand To Fuel Malaysia's 2012 Growth: Analysts

4 Safar 1433

By Nor Baizura Basri(Bernama)

KUALA LUMPUR, Dec 29, 2011- Malaysia's economy could face bigger challenges next year due to the adverse effects of the global economic slowdown but continuous domestic investment, coupled with strong domestic demand, are expected to lend support to the country's growth, analysts said.

Apart from that, spill-over effects from the implementation of the Economic Transformation Programme (ETP) entry point projects would also drive the country into a growth trajectory, they said.

RAM Holdings Bhd group chief economist Dr Yeah Kim Leng said domestic demand-led growth and increased regional trade and investment would be among the key areas that would help generate growth for the Asian country.

"In the case of Malaysia next year, we do expect, although we think that there will be some knock-on effects as a result of a slower external demand, I think the momentum generated by our rising private consumption and domestic investments can help insulate the economy from the adverse effects of the global slowdown," he told Bernama in an interview recently.

Since 2001, the greater shift towards domestic-led demand and gradual shift away from the G3 market (the United States, Europe and Japan) towards intra-regional demand for export, have helped Malaysia to reduce its dependency on the advanced economies, he said.

Yeah said the country's export to the U.S. currently accounts for about eight to nine per cent of total exports while export to Asian countries accounted for slightly more than 50 per cent.

"As a result of this shift in the economy, I think Malaysia now is slightly more resilient to the impending or looming slowdown of the global economy," he added.

According to Moody's Analytics, Malaysia, as well as other commodity producers like Indonesia, Australia and New Zealand, fared better this year in terms of domestic economic growth due to continued demand for agricultural products and industrial metals.

Despite Asia being the focus of global growth this year, inflation remained the main challenge in the first half of 2011 as central banks continued monetary tightening, before a regional slowdown prompted a shift toward policy easing in the second half, said the international credit rating agency.

Meanwhile, Asia was reportedly to increase its share of the world's gross domestic product (GDP) from the current 25 per cent to 35 per cent by 2020 while G3's share will likely fall from 48 per cent to 38 per cent.

On the local front, Prime Minister Datuk Seri Najib Tun Razak recently said the country would maintain a projection of five per cent growth for the economy this year and next year barring "something catastrophic".

In the third quarter of this year, Malaysia's economy expanded 5.8 per cent compared with 5.3 per cent recorded in the same quarter last year, due to stronger domestic demand.

"We are entering the crisis in a position that is slightly better than most countries largely because we have full employment and are still experiencing jobs growth and fairly stable income growth," Yeah said.

He said what is important is that our banks and financial system are in a relatively healthier position to ensure lending can continue as in 2009, and despite the global crisis, these banks' loans growth only reduced by half, from nine to 10 per cent to five to six per cent.

"That continuous credit flow is another important aspect supporting the economic growth. Without lending or credit flows, the economy will be in an even much worse position," he said.

Yeah said even though it will be a challenging environment for Malaysia, the strong fundamentals are there with Malaysian companies with relatively strong balance sheets, a healthy banking system and continuous household nominal income growth.

On the global front, the European economies would continue to be weaker and fragile next year and may take at least a decade to recover given the size of their debt, he said.

On the country's growth projection, Yeah said they are confident of achieving above five per cent growth for the last quarter and five per cent growth for the year overall.

"We are still uncertain as to how big the shock is, the magnitude as well as the duration of the shock which is oncoming.

"At this juncture, we are maintaining our forecast of 5.2 per cent for 2012 until the next review, which is next month," he said.

He said in the worst case scenario, factoring in export shock or a reduction of export by 10 per cent, at least two percentage points would be shaved from the GDP.


Monday, December 26, 2011

Malaysia's Attractiveness As Destination For Foreign Investment Grows

2 Safar 1433

By Manik Mehta

NEW YORK, Dec 27 , 2011 - Malaysia's attractiveness as a destination for foreign direct investment (FDI) has considerably improved in 2011, according to the latest evaluation released by management consultant, A.T. Kearney.

Although the study, known as "The 2011 Foreign Direct Investment Confidence Index List", is dominated by three economies - China, India and Brazil, Malaysia made a significant upward climb from its 21st ranking to 10th by the year-end.

Other Southeast Asian countries which improved their ratings were Singapore at 7 up from 24 and Indonesia at 9 from 20.

But, clearly, the winners were China, India and Brazil which even surpassed the United States in terms of attractiveness as a FDI destination, according to A.T. Kearney.

Nearly half of those surveyed saw a more positive outlook for Brazil (46 per cent) than in 2010. More than one third saw improvements for both India (37 per cent) and China (34 per cent).

China maintained its number one position in the Index.

Investors are looking to capitalise on the country's growing consumer market and service industry, as well as, its move up the value chain in the technology sector.

India also advanced in the standings, assuming the United States' former position, second place.

"Given its strong growth and huge market potential, India should see a sustainable rebound if it can continue to reassure investors that it is committed to its current reform path," a senior executive at A.T. Kearney observed.

Brazil is also a magnet of opportunity, moving to third place from last year's fourth and attracted more than half of all the FDIs in Latin America, and this year China became Brazil's largest foreign direct investor, with the focus of the inflows in commodities and energy.

The United States has slipped to fourth ranking, pulled down by its debt gridlock that shocked many investors.

Germany asserted its position as a main driver of the European economy, ranking fifth in the index.

Martin Sonnenschein, partner and managing director for Central Europe at A.T. said a "paradigm change" was taking place with the economic forces shifting from West to East.

"The foreign direct investment currents are increasingly turning away from established industry nations to emerging economies, Kearney added.

A variety of factors-including the sovereign debt crisis, the slow recovery in the United States and unrest in the Arab world made corporate investors cautious about the short-term future.

More than 60 per cent felt the recession had significantly changed the global business environment.

Given this realisation, Malaysia could make a strong pitch as an investment site that offers access to a 500 million strong hinterland combined market of the ASEAN group of which it is a founding member.

 Source: BERNAMA

Eventful 2011 For Aviation, More Headwinds Await In 2012

1 Safar 1433

By Saraswathi Muniappan

 KUALA LUMPUR, Dec 26,2011- It was undoubtedly an eventful year for the aviation sector in Malaysia which was dogged by controversies and surprises with the landmark share swap deal between rivals, AirAsia and Malaysia Airlines, topping the list and 2012 is not going to be any less.

The deal saw AirAsia's major shareholder, Tune Air Sdn Bhd, taking up 20.5 per cent share in MAS and Khazanah Nasional Bhd 10 per cent stake in AirAsia.

A management shake-up followed with AirAsia's chief executive officer, Tan Sri Tony Fernandes, appointed non-executive director of MAS and Tengku Datuk Seri Azmil Zahruddin Raja Abdul Aziz resigned as MAS managing director.

Then AirAsia and MAS emerged as official partners of Queens Park Rangers Football Club (QPR) with AirAsia sponsoring its "away" and "third shirt" and MAS the "home" shirts.

Fernandes holds 66 per cent stake in QPR.

However, the details of how the share swap sealed in September would work for both airlines beyond the above, were sketchy amid debates, mixed reviews and calls for investigation.

The latest to join the fray is the Malaysia Competition Commission (MyCC) where the Competition Act 2010 will come into force Jan 1, 2012.

MyCC's chief executive officer, Shila Dorai Raj, had said the commission has received complaints from consumers, urging it to look into the deal and whether it would reduce competition and result in expensive airfares.

Analysts, however, were positive on the collaboration, saying it would eliminate irrational competitive pricing, allow economies of scale, higher bargaining power and synergies.

They said it would give AirAsia a higher chance to fly routes which were previously exclusive to MAS and the national airline to achieve cost synergies in view of its high cost/available seat kilometre.

Some even noted that it could also result in MAS turning profitable as despite years of plans and revamp its financial woes continued in 2011 with common problems such as higher operating costs and spiralling fuel prices.

Earlier this month, yet another plan was announced by MAS' new chief executive officer, Ahmad Jauhari Yahya, which consisted of a series of action, including shrinking its network and a relentless focus on costs.

The plan, which was expected to allow MAS to return to the black by 2013, however, received a lukewarm response by analysts, saying such revamp and move were not new to the national carrier.

Among the routes MAS planned to suspend were Cape Town, Johannesburg, Buenos Aires and Dubai as well as four more routes via Sabah regional network.

AirAsia, on the converse, continued to expand its routes regionally, among the latest being Da Nang (Vietnam) and Surat Thani (Thailand).

It also opened a regional office in Jakarta, Indonesia to build relationship with Asean secretariat, which is also based there to work towards a one Asean sky and aviation authority like Europe's joint venture aviation authority.

It is also on track to list its Indonesian and Thailand affiliates.

AirAsia also hit a bumpy patch in its tiff with Malaysia Airports Holdings Bhd (MAHB) over the increase in airport tax at five airports nationwide.

Both also locked horns over the upgrade of the low-cost air terminal, KLIA2.

AirAsia X was also not spared from the controversies either, with news reports that it planned to withdraw its services to Paris, London, Mumbai and Delhi.

Its chief Azran Osman Rani, however, has denied the plan, saying the long-haul budget carrier has not made any decision yet.

The news reports said the implementation of the European Union's (EU) Emissions Trading Scheme (ETS) come Jan 1, 2012, visa restriction and additional airport fees in India were part of the reasons for the withdrawal.

The ETS scheme calls for airlines to pay up for carbon emissions it has not already accounted for.

An analyst said the industry was already struggling with volatile fuel cost and such ruling would only burden them further.

The International Air Transport Association (IATA), which represents nearly 240 airlines from 100 countries, were disappointed with the decision by the Court of Justice of the European Union to upheld EU's plan to include international aviation in the ETS from 2012.

"Today's (Dec 21) decision is a disappointment. It does not bring us any closer to a much-needed global approach to economic measures to account for aviation's international emissions.

"Unilateral, extra-territorial and market-distorting initiatives such as the EU's ETS are not the way forward," said IATA's director-general/chief executive officer, Tony Tyler.

IATA, in its recent report on the industry outlook, has painted a relatively bleak picture for 2012, citing the unresolved eurozone crisis as one of the factors, he said.

Tyler said airline profits could drop to US$3.5 billion from an earlier forecast of US$4.9 billion for a net margin of only 0.6 per cent from expected revenues of US$618 billion.

With various challenges and unresolved issues within and continued eurozone crisis that could continue to dampen global growth and air travel, airline companies need to brace themselves for more challenging headwinds.

 Source- BERNAMA

More Local Companies Keen To Invest In Malaysia

1 Safar 1433

KUALA LUMPUR, Dec 23, 2011 - The era of local companies being more keen to invest overseas has come to an end, says Deputy International Trade and Industry Minister Datuk Mukhriz Mahathir.

He said the companies had seen a lot of excitement in the local economy due to the Economic Transformation Programme and the Entry-Point Projects.

"Domestic direct investment (DDI) totalled RM19.7 billion, or 48.4 per cent, and foreign direct investment RM21 billion, or 51.6 per cent, just slightly higher from the DDI as at October, 2011.

"With the country achieving RM40.7 million in investments as at October, I believe we can achieve the same investment figure of RM47 billion recorded last year as we still have figures for the last two months to include," he told the media after launching the 'KL Principle Code of Ethics for the SMEs' programme here today.

Mukhriz said Sarawak was the top state with RM7.3 billion in investment as at October and the largest investor was local company, Leader Universal Aluminium (Sarawak) Sdn Bhd.

Selangor was second with RM6.8 billion, Johor (RM6.7 billion), Penang (RM5.7 billion), Negeri Sembilan (RM3.5 billion), Pahang (RM2.9 billion), Terengganu (RM1.4 billion), Perak (RM966 million), Kedah (RM765 million), Sabah (RM720 million), Kuala Lumpur (RM299 million), Kelantan (RM129 million) and Perlis (RM23 million.

 Source- BERNAMA

Thursday, December 22, 2011

Bank Negara International Reserves At RM429.8 Billion As At Dec 15

27 Muharram 1433

 KUALA LUMPUR, Dec 22 , 2011- Bank Negara Malaysia's (BNM) said its international reserves amounted to RM429.8 billion (equivalent to US$135 billion) as at Dec 15, 2011.

In a statement Thursday, BNM said the reserves position was sufficient to finance 9.8 months of retained imports and was 4.1 times the short-term external debt.

The main components of the international reserves were foreign currency (US$121.4 billion): International Monetary Fund reserves position (US$800 million); Special Drawing Rights (SDRs) (US$2.0 billion); gold (US$1.9 billion); and, other reserves (US$8.9 billion).

Its total assets, including international reserves, stood at RM481.114 billion.

The central bank's other assets included the Malaysian government papers (RM2.017 billion); deposits with financial institutions (RM30.678 billion); loans and advances (RM10.719 billion); and, other reserves (RM7.878 billion).

Its liabilities comprised paid-up capital (RM100 million); general reserve fund (RM13.644 billion); other reserves (RM20.345 billion); currency in circulation (RM58.617 billion); deposits by financial institutions (RM205.099 billion); Federal Government deposits (RM24.573 billion); other deposits (RM13.029 billion); Bank Negara papers (RM107.149 billion); allocation of SDRs (RM6.742 billion); and, other liabilities (RM31.814 billion).

 Source- BERNAMA

Moody's Remains Upbeat On Asia's Prospects

26 Muharram 1433

KUALA LUMPUR, Dec 22, 2011- Moody's Analytics is upbeat on Asia's prospects as domestic risk levels in Asia's economies remain low and Europe is expected to muddle through with only a mild recession.

In a statement Thursday, its senior economist, Glenn Levine, said Asia-Pacific economies would grow solidly in 2012 as the region's fundamentals were sound, confidence remained firm and policymakers still had ample ammunition to support growth.

Levine said the China outlook would drive the regional outlook.

"China is the number one export destination for all regional countries except the Philippines, and is the reason Asia will continue to grow faster than the rest of the world," he said.

He said the recent Chinese data confirmed that the economy was slowing, but at a manageable rate.

However, a credit crunch linked to a property market collapse remained the biggest risk and would drag much of the region into recession, he said.

On another development, Levine said, Asia's small, export-led economies were vulnerable to a global slowdown.

"Taiwan, Singapore and Hong Kong are among the most trade-exposed and will tip back into recession if the global economy slows significantly in 2012," he said.

Levine said Australia, Indonesia and, to a lesser extent, Malaysia would be lifted by Chinese commodity demand linked to their huge public infrastructure and investment projects.

He said the biggest risks would come from outside the region.

"Europe's debt problems were already weighing on growth through weaker trade and investment flows, but the bigger risk is financial contagion and the potential to expose domestic weaknesses," he said.

 Source- BERNAMA

Tuesday, December 20, 2011

S&P Expects Asia-pacific Economic Growth Prospects To Remain Resilient Next Year

25 Muharram 1433

KUALA LUMPUR, Dec 20 ,2011 - Standard & Poor's Ratings Services (S&P) expects the economic growth prospects in the Asia-Pacific to remain resilient next year despite a softer US economic outlook and uncertainty surrounding European sovereign risks.

S&P said the region's public and private infrastructure sectors were also expected to continue to expand in 2012, fuelled by strong demand, broad-based economic activity, significant ongoing capital expenditure requirements and favourable demographics.

"In contrast to the economic and financial challenges plaguing Western governments, economic growth fundamentals and government fiscal positions in Asia-Pacific are generally sound," it said in the report, entitled 'A Slowdown in Europe And China and Sluggish Exports Moderate Asia-Pacific Credit Outlook in 2012'.

It said surging capital flows may reignite inflationary pressures, distort currency values and create asset bubbles in the region.

S&P said exports could also fall sharply as demand in developed markets remained constraints with the risks higher for South Korea, Taiwan and Singapore. It said the stable performance of assets underlying securitisation transactions in Asia-Pacific, with the exception of Japanese commercial real estate, would likely to continue in 2012.

Its credit analyst, Ian Thompson, said the region, however, would remain immune to the problems in the advanced economies given that Europe was an important trading partner. "Slowing growth in China will be another key issue to watch out for," he said.


Monday, December 19, 2011

Malaysia Stock Markets Outlook This Week Remain Uncertain

23 Muharram 1433

Today’s news stated that BURSA Malaysia is expected to trend higher this week on oversold situation, technical buying and year-end window-dressing, dealers said. According to the source, they said the other positive factors to support the local index were a stable euro, well-subscribed Spanish bond auction and a short-covering rally in the European stocks.

However, the benchmark FBM KLCI ends with morning trading at 12.30 p.m. lower by 0.68 points or 0.05% to 1,465.54.There were 201 counters up, 403 down and 249 remained unchanged. Volume stood at 886.8 million shares valued at RM458.1mil. According to HwangDBS key equity indices on the Wall Streets ended mixed last Friday as Fitch Ratings lowered France's credit outlook, and also put Spain, Italy, Belgium, Slovenia, Ireland and Cyprus on a Rating Watch Negative review, which was expected to be completed by the end of January (FBM KLCI ends morning market lower, 2011).

Whether up or down, it seems like the overall stock market outlook for this week is remain uncertain.

FBM KLCI ends morning market lower. (2011, December 19). Retrieved December 19, 2011, from thestaronline:


Saturday, December 17, 2011

Show Me The Letter To World Bank, Mahathir Challenges Anwar

22 Muharram 1433

 BUTTERWORTH, Dec 17 , 2011- Former prime minister Tun Dr Mahathir Mohamad today challenged Opposition chief Datuk Seri Anwar Ibrahim to show a letter purportedly written by him to the World Bank for funds during the financial crisis in 1999.

Dr Mahathir said on the contrary he was the one who had refused the World Bank funds.

"I know that if we had accepted the World Bank funds, we will become its slave. Hence, we did not do so," he said after opening the third Multaqa Wehdatul Ummah here Saturday.

Dr Mahathir was commenting on Anwar's allegation that the former prime minister had written to the World Bank for funds during the financial crisis in 1999.

"If Anwar's allegation is true, please show me the letter. I challenge him to swear by the Quran in a mosque and I'm willing to do so if needed," said Dr Mahathir.

He said Anwar was known for advocating measures introduced by the World Bank and the International Monetary Fund (IMF) in tackling the financial crisis at that time.

"I used to tell him (Anwar), if we were to take the World Bank funds, we will not have enough money to pay the salaries of our officers. But he was bent on advocating the World Bank measures to the extend that it clouded his thinking," said Dr Mahathir.

Meanwhile, Tan Sri Nor Mohamed Yakcop, who was present, said he could vouch for Dr Mahathir that the former prime minister had rejected the World Bank funds.

Nor Mohamed said he could still remember that a World Bank representative came to see Dr Mahathir to discuss on how Malaysia could avoid the financial crisis in 1999.

"The World Bank representative had proposed to Dr Mahathir to increase housing loan interest rates and restrict government's spending while Bank Negara should withdraw all loans to avoid economic crisis.

"But Dr Mahathir told him that the proposals would cause bloodshed in the streets and he said let it be bloods in the streets, much to Dr Mahathir's chagrin," Nor Mohamed said, adding that Dr Mahathir told him off and told him to leave the office.

 Source- BERNAMA

Thursday, December 15, 2011

Target-volatility Strategies, A Response To Current Investment Dilemma

20 Muharram 1433Hijrah

By Tengku Noor Shamsiah Tengku Abdullah

SINGAPORE, Dec 15 ,2011- Insurance companies and pension funds have traditionally played an important role as providers of long-term risk capital and, in a world of deleveraging credit institutions, are crucially needed to finance economic development.

However, recent and forthcoming changes in accounting and prudential standards encourage long-term institutional investors to invest in low-risk assets that are highly correlated with liabilities.

Meanwhile, in the current low-interest rate environment, institutional investors cannot meet their future obligations out of the yields on these instruments.

At the same time, risk-based capital charges and financial reporting standards penalise assets that offer high-risk premia and make it expensive for long-term investors to directly hold volatile assets.

In a new study entitled "Structured Equity Investment Strategies for Long-Term Asian Investors" conducted with the support of Societe Generale Corporate & Investment Banking, Stoyan Stoyanov, Head of Research at EDHEC Risk Institute-Asia and professor of finance at EDHEC Business School, examines the dilemma of how to extract risk premia while limiting exposure to downside risks.

The study looks at the control of volatility as an objective and assesses various strategies to pursue this goal: a fixed mix of equity and risk-free assets, dynamic allocation between these assets targeting a fixed volatility, traditional portfolio insurance implementing a capital guarantee, and a target volatility strategy overlaid with a capital guarantee.

The empirical focus on Asian equity markets is justified not only by the region's importance in the shifting balance of economic power but also by the higher volatility of these markets and the difficulty of hedging in the absence of local volatility derivatives.

Research results show that a target-volatility strategy allows for effective management of volatility and that it both significantly reduces the downside risks and improves the upside potential compared to a fixed-mix strategy.

It also augments investors' access to the upside potential when a capital guarantee overlay is applied. Furthermore, the explicit management of volatility is found to reduce the cost of capital protection.

The study also documents utility gains for risk-averse investors regardless of the presence of a capital guarantee overlay and argues that significant allocations should be made to structured equity investment strategies with volatility targeting.

The study has important practical implications for long-term investors. Though evidence is taken from examining Asian equity markets, the results are applicable in other regions and for asset classes that exhibit similar characteristics.

EDHEC-Risk Institute is part of EDHEC Business School, one of Europe's leading business schools and a member of the select group of academic institutions worldwide to have earned the triple crown of international accreditations.

Societe Generale is one of the largest European financial services groups.

 Source- BERNAMA

Tuesday, December 13, 2011

Malaysian Economy Not Affected By Eurozone Crisis, Says Second Finance Minister

18 Muharram 1433 Hijrah

 KUALA LUMPUR, Dec 13 ,2011 - The eurozone debt crisis has not affected the Malaysian economy, said Second Finance Minister, Datuk Seri Ahmad Husni Hanadzlah.

He said the country was on track to achieve next year's economic growth target of between five and six per cent 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.

"What would affect us, if there is a global recession, is our exports -- our link to the world," he told reporters after the "Hadiah Sako 3 Bagi Novel Nasional" prize-giving ceremony and book launch here today.

However, he hoped, that the EU governments would find a solution to end the eurozone crisis immediately.

Ahmad Husni said for this year, Malaysia would be able to achieve the projected five per cent growth rate, given that a lot of the government projects had been kicked-off in the first half of this year.

 Source- BERNAMA

Friday, December 9, 2011

Governor Denies Nomura's Report On European Banks' Exposure To Malaysia

13 Muharram 1433 Hijrah

KUALA LUMPUR, Dec 9, 2011- Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz today denied a report by Nomura International, which stated that the European banks' exposure to Malaysia amounted to US$50 billion (RM155 billion) or about 19 per cent of the country's gross domestic product.

"That is not correct information. What I really want to emphasise is our foreign banks are locally incorporated and therefore they have less exposure compared to other places where they are not locally incorporated.

"We'll issue the numbers because that's not correct. It's something like less than five per cent or so, it's very low," she told reporters when asked to comment on the issue after launching the central bank's MobileLink here today.

An economist at Nomura International, an asset management company, stated recently that Malaysia was one of the economies that would weaken the most as it was in the economies weaker group.

The economist also said Malaysia ranked third in Asia, excluding Japan, in terms of exposure to European bank claims after Hong Kong and Singapore, which could mean drying up of liquidity should European banks start cutting their exposure to the region.

Zeti also urged the public to report to the central bank and the police on scam activities.

"We don't want to wait until it's serious before we inform the public that there are these scams. It's not just telling people who are not involved in the financial sector but people who are already in the financial mainstream, that means participating in the financial system.

"They don't have the knowledge that some of these are scams and it is important to be educated," she said.

Zeti also said there were all kinds of financial wealth products and a lot were not correct.

"Sometimes they use Bank Negara letterheads and names of Bank Negara senior officials. All these, of course, can be charged (in court) and the public should report them not only to Bank Negara but also to the police," she added.

 Source- BERNAMA

Firms Must Explore New Business Models To Face Media Digitisation Challenges

13 Muharram 1433 Hijrah

By Tengku Noor Shamsiah Tengku Abdullah

 SINGAPORE, Dec 8 , 2011- Companies need to be open in exploring new business models, collaborative partnerships and develop new capabilities to deal with the challenges of media digitisation.

James Kang, assistant chief executive in the government chief information office at Infocomm Development Authority of Singapore (IDA), said with the proliferation of consumer devices such as tablets, connected televisions and smartphones, the demand for digital content and services would continue to increase.

He said IDA was looking at ways to help the industry tap these monetisation opportunities.

"As companies move towards digitisation of their processes and services, the demand for manpower skilled in these new areas will increase.

"IDA welcomes the industry to leverage on its manpower development programmes," he said in his address at the Digital Marketplace Forum here Thursday.

Kang said to enable the media industry to flourish, IDA also recognised the need for online protection policies to provide a conducive environment for companies to monetise their content.

"Currently, in consultation with the industry, a multi-government agency effort is in place to study measures to improve online content protection in Singapore," he said.

 Source- BERNAMA

Wednesday, December 7, 2011

Malaysia Headed In The Right Economic Direction, Says Economist

11 Muharram 1433 Hijrah

By Christine Lim

 KUALA LUMPUR, Dec 6 , 2011 - Malaysia is moving in the right path in terms of transforming its economy to a high-income status through the Economic Transformation Programme, even though this achievement may involve a long term process, said a prominent European economist, Douglas McWilliams.

McWilliams who is chief executive of The Centre for Economics and Business Research (Cebr) based in London said Malaysian economy has evolved from being reliant solely on export to a more diversified base with the services sector emerging to be an important economic driver.

"While economic growth will be impacted by the dismal outlook in the global economy on the backdrop of the escalating Europe sovereign debt crisis, Malaysian economic growth will be right on track with the pick up in global economy in 2013," he said during an interview with Bernama TV on Monday.

He also projected a five per cent growth for Malaysian economy this year and a decline to between 4.2 per cent and 4.3 per cent growth next year in line with global economic weaknesses.

He said Malaysia had a lot of scope in terms of fiscal expansion by the government as its debts were not huge compared with the sovereign debts in Europe.

"The key is to ensure that domestic consumption is able to fill the hole for the slowdown in export growth," McWilliams informed.

McWilliams also expects Bank Negara to continue to monitor the economic situation closely to see if there is a need for a cut in interest rates.

He said the European leaders were also working on a concrete solution to the European debt crisis.

McWilliams said domestic consumption will play a pivotal role in the Asean economy with action by governments to increase domestic consumption.

He said Asean currencies were also rising in value compared with other currencies, while western currencies were getting weaker.

He said the Western economy was also bracing for structural adjustments with higher wages and longer holidays compared to Malaysia and the rest of Asean countries.

 Source- BERNAMA

Saturday, December 3, 2011

Remisiers Association To Seek Fresh Avenue To Standardise Brokerage Fee

8 Muharram 1433 Hijrah

By Santhia Panjanadan

 KUALA LUMPUR, Dec 3 , 2011 - The Remisiers Association of Malaysia (Persama) will continue to seek avenues to standardised transaction cost in order to manage irregular stock price behaviour.

President Sam Ng Soon Lee said the absence of a standardised brokerage fee was one factor that prolonged capital flow bottleneck and loss of confidence among the investing public.

Persama and the Association of Stock Broking Companies had on June 13 agreed on a standardised transaction cost but this was verbally turned down by the Securities Commission.

"We disagree with the current method of brokerage liberalisation," he told Bernama after the association's annual general meeting here today.

At present, the fee structure was to the advantage of local and foreign fund managers and to the disadvantage of retail participants.

"If trading participants believe the current rate is too high, then how low do they want the fee to be?.

"It is unfair to go to zero rate to manage listed companies price volatility as it would result in malpractices and loss of confidence," he added.

 Source- BERNAMA

MAHB Chairman Extends Support For Bashir To Stay On As Managing Director

7 Muharram 1433 Hijrah

SEPANG, Dec 2 ,2011- Malaysia Airports Holdings Berhad (MAHB) chairman Tan Sri Dr Aris Othman extended his full support to a proposal to extend the service of Tan Sri Bashir Ahmad as the company's managing director.

"I can say with confidence that the entire Board of Directors will extend their full support to him being retained as the managing director.

"In my opinion, the current situation is critical from the aspect of our standing and development. We should not make any changes whatsoever, particularly for this position," he said.

Aris was speaking at the 6th joint signing ceremony with the Peninsular, Sabah/Labuan and Sarawak, Malaysia Airports Holdings Berhad Workers Unions, here.

Bashir's position as managing director came under question again following a media report that he would be replaced by Pos Malaysia Berhad Chief Executive Officer (CEO), Datuk Syed Faisal Albar Syed Albar, whose contract ends at the end of this month.

Bashir's contract with MAHB ends in June next year.

The proposal to extend Bashir's service was voiced by the President of the Peninsular, Malaysia Airports Holdings Berhad Workers Union, Hussin Shaharn at the same ceremony.

It was also proposed at the event that a memorandum be sent to the Prime Minister, Datuk Seri Najib Tun Razak, on the proposal.

Hussin also proposed that another memorandum be sent to the Prime Minister on the confusion at the Low Cost Carrier Terminal (LCCT)yesterday in relation to the, "Say No To Airport Tax Increase", by Air Asia.

Air Asia is protesting MAHB's decision to raise the airport tax by between RM7 to RM14 at its five airports in the country, effective Thursday.


Thursday, December 1, 2011

Malaysia To Outperform In Tough First Quarter, 2012, Says Goldman Sachs

6 Muharram 1433 Hijrah

KUALA LUMPUR, Dec 1 ,2011- Malaysia is expected to outperform in a tough first quarter next year against the expected downside for the region, says Goldman Sachs.

The international research house says Malaysia is seen as a safe haven given the uncertain global economic environment.

However, overall, it expects the country to underperform next year.

"We find the Malaysian market is least sensitive to growth factors across Asia," it said in the Goldman Sachs Global Economics, Commodities and Strategy Research on 2012 Outlook.

It said the government's initiatives to boost investments via the Economic Transformation Programme (ETP) continued to gain momentum as reflected in the rising public and private investments.

"We believe investors are not yet fully aware of the economic potentials from these efforts and that this "investible gap" constitutes an attractive opportunity," it said.

Goldman Sachs also said the banking industry would be a good proxy for Malaysia's defensive domestic demand and with huge captive onshore capital, not withstanding its moderate non-performing loan risks.

It expects the ETP to mitigate some potential downside risks to the sector next year, with more private sector involvement.

Goldman Sachs said it has classified the Malaysian market outlook to overweight.

Earnings growth and contribution to growth would be primarily propelled by domestic demand sectors, spanning from consumer staples and plantation stocks to gaming and hotel operators, it added.

 Source :BERNAMA