The Star Online: Business
The Star Online: Business |
| Posted: 08 Jul 2011 09:34 PM PDT Global foreign exchange market THE week began on positive note with the European Union (EU) approving a 12 billion-euro disbursement to Greece. However, nagging worries over eurozone's sovereign debt angst continue with Moody's downgrading Portugal's sovereign credit rating by four notches to "junk" status. The region's economy showed a slowing momentum, as EU's manufacturing PMI expanded by the weakest pace in almost two years in June at 52.0 points, compared with 54.6 points in May. The European Central Bank, however, lifted its benchmark interest rate by 25 bps to 1.5%, and cited close monitoring of upward risks of price stability. Euro rose against the US dollar to 1.4578, before paring gains to trade lower at 1.4350-levels at the point of writing. As of noon yesterday, the British pound slipped against the greenback to trade at 1.5870-levels. The United Kingdom diverges further from the EU by keeping interest rates on hold at 0.5% and held its bond-purchase programme unchanged at 200bil. In the United States, sentiments were buoyed by better-than-expected data. This includes an upside surprise of the ISM manufacturing index, which rose by 3.6% to 55.4 points in June from a month earlier. The increase was the first in four months, driven by a rise in inventories and employment as well as marginal improvement in key new orders. Consumer confidence as gauged by University of Michigan was slightly weaker at 71.5 points in June compared with 71.8 in May. During the week, the US dollar index rose by 0.91% to 74.92. China's growth momentum is slowing as manufacturing PMI fell below expectations to 50.9 points in June from 52.0 in May. In addition, non-manufacturing PMI declined to 57.0 points, 4.9 points lower than the previous reading. A separate gauge as measured by PMI also signalled a slowdown. Malaysia's exports came in weaker-than-expected posting a slower growth of 5.4% year-on-year (y-o-y) in May, a sharp fall from April's 11.1%. The decline was largely due to reduction in shipments to the United States. Meanwhile, imports also slowed to 5.6% from 9.4%, prompting trade surplus to narrow to RM$8.49bil. Despite Asia's weak data, the Bloomberg-JPMorgan Asia Dollar index increased by 0.36% to 119.34. We expect the US dollar/ringgit to trade within the range of 2.9800 to 3.0200 next week. US treasuries (UST) market UST yields exhibited a "twist" with the two-year yields rising by a marginal 0.3bp to 0.475% while the 10-year yields declined by 3.2bps to 3.151%. However, demand for US safe haven may continue to persist given the moderating global growth environment and lingering concerns over eurozone debt issues. Malaysian bond market Growth in the second quarter of this year has generally eased due to slower external demand, greater than expected disruptions due to the Japan tsunami events in March and lower than projected public sector investment. However, it expects growth to pick up in the second half driven by expansion of private consumption and investment, but cautioned that heightened external risks may continue to pose as downside risk to growth. On inflation outlook, Bank Negara cited inflation risks remain on the upside. It added that supply factors remain as key determinant but there are some signs that domestic demand factors could exert upward pressure on prices in the second half of 2011. Recall, May CPI came in higher at 3.3% y-o-y (April: 3.2% y-o-y). We expect Bank Negara to potentially resume OPR normalisation by another 25 bps in the second half, bringing it to a more neutral level of 3.25% by end-year. However, the path for further normalisation would depend on the assessment of economic conditions and sustainability of growth momentum. The reopening for the five-year benchmark Malaysian Government Securities (MGS)was announced this week, with issue size of RM4bil. Auction for the mentioned bonds will be held on July 13. In the MGS/GII market, RM9.8bil worth of trades were transacted with a daily average trading volume of RM2.5bil versus last week's daily average of RM3.4bil. At the shorter end of the curve, the three-year benchmark yield climbed 3 bps to 3.25% as at Thursday's close, the five-year yield increased 2 bps to 3.51% while the seven-year yield closed unchanged at 3.71%. At the longer-end, the 10-year yield fell 1 bp to 3.92%, the 15-year yield fell 3 bps to 4.11% while the 20-year yield fell 1 bp to 4.22%. In the public debt securities market, a total of RM1.5bil worth of trades was transacted. The GG/AAA segment and the AA segment contributed 46% and 51% of the trades, while the remaining 3% were contributed by the single-A segment. Daily average trade volume stood at RM367mil, lower than RM438mil in the previous week. Within the GG/AAA segment, Pengurusan Air SPV 6/16 contributed RM100mil trades with yield closing unchanged at 3.84%. Yield on the National Bank of Abu Dhabi 12/20 closed 2 bps lower at 4.6% with RM70mil done, while Danga Capital 4/15 and Cagamas MBS 12/12 closed unchanged at 3.86% and 3.63% with RM60mil done each. In the AA segment, buying interest was seen on power bonds. Yields on Sarawak Energy bonds maturing 2016-2026 closed 2-21 bps lower at 4.09-5.18% with RM255mil done in total, while Jimah Energy bonds maturing 2014-2021 closed 2-44 bps lower at 4.06-5.05% with RM67mil done in total. RM45mil trades were transacted on Ranhill Powertron II bonds maturing 2015-2021 with yields closing 10-42 bps lower to reach 4.24-4.90%. Ringgit interest rate swap (IRS) market The ringgit IRS rates softened from one month peak during the week after Malaysia posted softer May export data. The shorter tenures fell even further after Bank Negara kept benchmark overnight policy rate at 3%. Overall, the rates ended the week by 2-9 bps lower. ● For enquiries, contact: fx-research@ambankgroup.com or bond-research@ambankgroup.com Full Feed Generated by Get Full RSS, sponsored by USA Best Price. |
| Posted: 08 Jul 2011 09:34 PM PDT A new dawn in world economy? Title: Uprising Will Emerging Markets Shape or Shake the World Economy? Author: George Magnus Publisher: John Wiley & Sons Ltd At first glance, the title Uprising gives one the impression that the book is concerned about rebellion or revolt, or matters related to violent political conflicts involving armed resistance. However, after reading its small-print sub-title Will Emerging Markets Shape or Shake the World Economy? and a quick browsing through its content, one realises that the book is actually an in-depth analysis of the contemporary global economy, in particular the influence and impact of the new emerging markets with the focus on the shift of economic power from the West to the Orient, especially China. Its author George Magnus is a prominent investment banker and global economist, who has been acknowledged as the key analyst who had predicted the recent world financial crisis in early 2007. He is a senior economic adviser at the UBS Investment Bank in London, and had held similar posts at the Union Bank of Switzerland and SG Warnurg. Magnus is also a popular and respected public commentator on world financial matters, contributing frequently to the Financial Times of London, the BBC, Bloomberg, the CNBC and several other prominent economic, business or financial publications. He is also author of the 2008 definitive international economic analytical book The Age of Aging: How Demographics are Changing the Global Economy and Our World. Hence, Uprising is not simply any ordinary run-of-the-mill book, but a major authoritative book which anyone concerned with the contemporary global economy and the direction it is moving should read and reflect deeply on. What Magnus said in his book should not be treated lightly as he is no false prophet when it comes to matters of international economic wheeling and dealing. Magnus begins his book with an incisive narration and analysis of the world events building up from the first year of the new 21st century to the current global economic scenario. He gives a sharp observation, and penetrating and critical analysis of events in China, including the implications of a world sporting event like the August 2008 China Olympic Games, which took place sandwiched between the May 2008 Great Sichuan Earthquake which claimed nearly 70,000 lives, and the October 2008 world financial earthquake following the collapse of the US investment bank Lehman Brothers, which, as Magnus puts it, "brought the world economy to the brink of an economic Armageddon, unrivalled since the Great Depression of the 1930s". In his 358-page book, Magnus sets out to explain the impact and effect that the 2008 financial crisis has on the major emerging markets, and why the rich developed Western nations is going all out to challenge and curb their increasing threats, especially of China and India, in the global economic order. A major theme of the book as Magnus puts it, is that "the West's financial crisis sparked a major change in the structure of the world economy, and that China's capacity to also embark on structural change voluntarily is weak, unless it is specially geared to the long-run interests of the Communist Party's grip on power". This authoritative definitive book examines the two major economic powers and leading emerging markets in Asia – China and India – and several minor but significant markets in Eastern Europe, and also Turkey. Currently, the emerging markets are headline news. And the question uppermost in the minds of political and business leaders in all these emerging markets of the world is what will happen following the 2008 world financial crisis and what does the future mean and hold for global finance, trade and commerce. Magnus provides significant suggestions and pragmatic guidelines to resolve this global economic dilemma. He presents a persuasive and cogent perspective on China and the other emerging markets from a post-financial crisis situation, urging those with economic potency to seriously reconsider their attitude and approach to the emerging new world economic order. A fundamental matter to critically and analytically examine is the question of what economic reforms are needed to meet the new global goals. Magnus should most be appreciated for offering a convincing critical analysis of what the future global economy may look like – not merely for the emerging markets, but for policy-makers, businesses, financiers, investors, economists, and even ordinary citizens concerned with the economic well-being of their nation and the world. Magnus deals with matters such as climate change, commodity prices, and world demographic trends, and gives valuable insights into the implications of these issues for the world economy. One significant question Magnus deals with is whether the 21st century belongs to China. The Communist nation operating on enterprise capitalism for the last 30 years is now all set to regain what Magnus has pointed out in his book as its premier economic power it held from ancient times till the early part of the 19th century. For all intent and purpose, China is set for an economic renaissance. It will soon regain its ancient mantle as a world economic power it lost when its reticent conservative bureaucracy forced it into international relation isolation while Europe moved economically forward with an industrial revolution in the 19th century. The Uprising by the plucky economic seer Magnus is certainly essential reading for anyone who wants to understand and care about the future of the global economy. Understanding the context, content and challenges of the world economic scenario during the first decade of this century is certainly vital for those responsible for making policies, plans and programmes to chart the direction, set the trend, and strive for vigorous economic success in their nations. Thanks to Magnus, his book has provided the seeds for the planting, growing and harvesting of serious objective thinking, critical pragmatic evaluation, constructive practical ideas, and effective and efficient creative implementation of economic policies, plans and programmes. 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| Posted: 08 Jul 2011 09:33 PM PDT Flipping Burgers to Flipping Millions: A guide to financial freedom Author: Bernard Kelly Publisher: Hyperion WHETHER you have your dream job, operate your own business or are about to report to your first job, how you think about money is important. Few families build a billion-dollar family name in one generation. Which means that somebody, generations before the family became billionaires, had a vision for their family to become rich. You may not think it is possible for your family to become one of those billion-dollar families. And you are right that it is not likely to happen in your lifetime. But if you are willing to think beyond your lifetime, and follow a plan and stay focused, you will have an incredible life. This book is about financial basics, quality of life, retirement and legacy. The author is McDonald's operations consultant, so he will be giving readers examples from his experience with the fastfood business. Tough Calls from the Corner Office: Top business leaders reveal their career-defining moments Author: Harlan Steinbaum Publisher: Harper Business THIS is a treasure trove of rich business wisdom, stories of tough decisions and hard-won victories, and lessons from a lifetime of acheivement in the world of business. It offers inspiring stories, lessons, principles, strategies, solutions and ideas drawn from every stage in a successful career, from key choices to final leave-taking from the world of work. Thirty-nine of America's most succesful business leaders share the most important decisions of their career, and the life and career lessons they hold for us all. The author writes about making career choices, taking that entrepreneurial leap, success versus risks, business models, reposition and refocussing, and when to let go of that business. Bust: Greece, the Euro, and the sovereign debt crisis Author: Matthew Lynn Publisher: Bloomberg Press IN 2001, Greece was acccepted into the Eurozone. Bloomberg columnist Matthew Lynn explores Greece's rise and fall and the global repercussions of its financial disaster. He writes about its implications for a fragile global economy. Lynn also looks at how the contagion has spread. He blends financial history, politics and current affairs to tell the story of how one nation rode the wave of economic prosperity and brought a continent, a currency, and potentially, the global financial system into chaos. Full Feed Generated by Get Full RSS, sponsored by USA Best Price. |
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