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
Monday, December 26, 2011
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
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
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
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
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.
Source- BERNAMA
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.
Source- BERNAMA
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.
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.
Reference:
FBM KLCI ends morning market lower. (2011, December 19). Retrieved December 19, 2011, from thestaronline: http://biz.thestar.com.my/news/story.asp?file=/2011/12/19/business/20111219110349&sec=business#13242776194241&if_height=492
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