The Star Online: Business
The Star Online: Business |
- Furniture exports improve in H2
- Coping with Europe's chaos
- Tokyo, Osaka exchanges eye merger in autumn 2012: report
| Furniture exports improve in H2 Posted: 06 Nov 2011 06:28 PM PST GEORGE TOWN: Export sales of Malaysia-made furniture products are likely to be RM7bil to RM7.5bil this year compared with RM7.95bil last year. Earlier in June, the Malaysian Furniture Entrepreneurs Association (MFEA) had projected a 15% drop to RM6.8bil. From January to August, the value of furniture exported by Malaysia was RM4.9bil, down about 7.9% compared with RM5.3bil in the corresponding period last year. MFEA president Lor Lean Sen told StarBiz that orders for Malaysia-made furniture had improved in the second half, driven by demand from Japan, India, Russia and Saudi Arabia. "Exports to Japan, due to its reconstruction activities, increased to RM554mil during the January-August period compared with RM433mil achieved in the same period a year ago," he said. Lor said Japan was the second largest market for MFEA members, contributing about 8.9% or RM709mil to their RM7.95bil export revenue in 2010. He said exports to India improved to RM171mil during the eight months compared with RM137mil previously. "Sales to the United States have also improved in the second half over the first half of 2011," he said. Shipments to Saudi Arabia increased to RM101mil in the eight months compared with RM88mil a year earlier, while exports to Russia improved to RM51mil against RM43mil previously. "The fact that ringgit has weakened by 3% to 5% in the third quarter also helped to improve the export sales," Lor said. The association has about 3,000 members, of which about 30% are involved in export business. On raw materials, Lor said local rubberwood prices had increased by 10%15% to RM1,500 to RM1,800 per tonne, depending on the grade, compared with the last quarter. "This has increased the cost of production, which erodes our competitive edge. Rubberwood pricing has gone up because of the rainy season, which stalls the replanting of rubber trees, and due to the higher offer price from overseas customers. "Raw material prices are likely to go up further in the future," he said. Lor said the markets in the United States and Japan were likely to improve next year but it would decline in Europe. "We are also getting orders from the customers of our competitors in Thailand which have been unable to produce due to the floods in that country," he said. Full content generated by Get Full RSS. |
| Posted: 06 Nov 2011 04:57 PM PST NEW YORK (Reuters) - Wall Street may find it hard to rally this week as Greece's new and untested coalition begins the process of ratifying a 130 billion-euro lifeline and the fate of Italy's government hangs by a thread. Greek Prime Minister George Papandreou and conservative opposition leader Antonis Samaras agreed on Sunday to form a new coalition government to approve the euro zone bailout deal. On Wall Street, the welcome was cautious. "We come back to whether this deal is sufficient to solve the problem," said Jerry Webman, chief economist and senior investment officer with Oppenheimer Funds in New York. "I think it is a reasonable step in the right direction, but in my opinion the answer is no." With the immediate crisis in Greece seemingly under control for now the next flash point for markets could be Italy, where premier Silvio Berlusconi's fate rested on a group of party rebels threatening to pull the rug from under his government this week. The renewed flare up in Europe's debt crisis, which started just days after investors thought a deal had been reached at an EU summit in Brussels, has again stressed Europe's credit markets and drove the first weekly fall in U.S. equities in a month. Investors fear that a disorderly default of an EU sovereign would trigger losses in creditor banks that could ricochet around the global financial system much in the same way the bankruptcy of Lehman brothers hit markets in 2008. Italian bonds sold off again on Friday to push their yield to a record euro-era high above 6.4 percent. The spread over German bunds, reflecting the higher risk premium investors place on Italy, also hit a record above 4.6 percentage points. But although stocks fell last week, the S&P 500 held the top end of its recent trading range at around 1,250. That has been seen as a sign of resilience by investors who have become emboldened by better-than-expected U.S. data and corporate earnings. The formation of a new government in Greece will be another support under the market and may even spur some risk-taking when markets open -- but it is not expected to last. "It's the best-case scenario and may spark a brief relief rally," said Alan Ruskin, head of G10 currency strategy at Deutsche bank in New York. "But it won't last and we will soon go back to focusing on Italy." Friday's U.S. monthly jobs report suggested some improvement in October, even though the headline payroll numbers appeared weaker than expected. Nonfarm payrolls rose a tepid 80,000 in October, below economists' expectations. But employers added 102,000 more jobs than previously estimated in August and September. And the U.S. unemployment rate slipped to 9 percent. It had been stuck at 9.1 percent for three straight months. "What I'm seeing at the moment is that investors are getting more reassured with the picture that the U.S. may actually do OK despite the troubles in Europe," said Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, which manages about $13 billion. "The more recent data points on the U.S. economy and earnings profiles are supporting that assertion," she said. The benchmark Standard & Poor's 500 index <.spx> posted an 11 percent gain for October -- its best monthly percentage rise since December 1991. With results in from some 433 of the S&P 500 companies, 70 percent have beaten forecasts on third-quarter earnings, defying views that growth would be hit by the problems in Europe and a slower economy in China. Analysts have said earnings growth has helped to support the market and has taken some of the focus away from Europe, even if just momentarily. More reports are expected this week, including several retailers like Macy's , whose results could shed some light on how the holiday shopping season may go. EUROPE STILL CAUSE FOR VOLATILITY Still, strategists see plenty of volatility ahead, making any big moves hard for short-term investors. The CBOE Volatility Index <.vix> fell 1.1 percent to close at 30.16 on Friday, but is well above levels from just last summer. It was trading near 20 in early August. For the week, the VIX rose 22.9 percent following wide market swings in four of five trading sessions. By taking a longer-term approach, though, some investors have been able to see the current situation as a buying opportunity, analysts said. Stock valuations are cheap, so if earnings hold up, investors are likely to be better positioned in stocks than in bonds or cash, they said. The S&P 500 forward price-to-earnings ratio is now at 12, its lowest in years. "Savvy investors are using the dips to put some money to work, but this is a very difficult market if you're a short-term trader," said Fred Dickson, chief market strategist at The Davidson Cos. in Lake Oswego, Oregon. Among this week's key economic indicators are the U.S. international trade deficit for September, due on Thursday, and on Friday, the preliminary November reading on consumer sentiment from the Reuters/University of Michigan surveys. |
| Tokyo, Osaka exchanges eye merger in autumn 2012: report Posted: 06 Nov 2011 04:55 PM PST TOKYO (Reuters) - Tokyo Stock Exchange and Osaka Securities Exchange are in the final stages of talks to merge with the aim of combining forces in the autumn of 2012, the Nikkei newspaper reported on Monday. Under one likely scenario being discussed, the unlisted Tokyo bourse (TSE) would first take a majority stake in the smaller but listed Osaka exchange (OSE) as early as next spring through a public tender offer, the Nikkei said. The two would then merge operations and the Osaka exchange would remain listed as the surviving entity, the newspaper said. Merger talks between the exchanges began in March with the aim of better competing amid weak stock market conditions in Japan and a wave of mergers and alliances among global exchanges. The two have complementary strengths, with the Tokyo bourse controlling more than 90 percent of cash-equity trading volume in Japan and the Osaka exchange the top player in Nikkei index futures and other derivatives. The head of the Tokyo exchange, Atsushi Saito, who originally said he wanted to list it before a merger, told Reuters last month that avoiding an initial public offering might speed up the process. "From the viewpoint of TSE shareholders, they will be listed, whether that is a direct listing or a consolidated, indirect listing," Saito said in the interview. Two proposals being discussed would set the maximum stake to be purchased in the tender offer at either 50.01 percent or 66.6 percent, the Nikkei said. The two firms would create a holding company and four units specializing in cash products, futures trading, settlement and self-regulation, the newspaper said. Saito is expected to become CEO of the new company while OSE head Michio Yoneda will become chief operating officer, the Nikkei said. The TSE and OSE both issued statements saying nothing had been decided. Saito and Yoneda are due to meet soon with discussion likely to focus on the merger ratio. The two sides had been unable to reach a consensus on the value of the TSE but appear to have made progress on this point, the paper said. The TSE's market value is expected to be set at 1.5 to 2 times that of the Osaka bourse, which was 98.5 billion yen ($1.3 billion) as of Friday's close, the Nikkei said. Full content generated by Get Full RSS. |
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