The Star Online: Business
The Star Online: Business |
- Bank of Japan boosts stimulus again
- The FBM KLCI snaps gain streak in early trade
- Global report ranks Malaysia among the most ICT-enabled
| Bank of Japan boosts stimulus again Posted: 20 Dec 2012 06:32 PM PST TOKYO: The Bank of Japan delivered its third shot of monetary stimulus in four months in a prelude to more aggressive action next year as it faces intensifying pressure from the country's next leader for bolder action to beat deflation. It also signalled setting a higher inflation target at its next meeting in January, when a new government will be in place. Shinzo Abe, whose opposition Liberal Democratic Party (LDP) won Sunday's election by a landslide, has put the central bank's independence on the line by repeatedly calling for a binding 2% inflation target, double its current price goal. Feeling the heat, the central bank expanded its assetbuying and lending programme by 10 trillion yen (US$119bil) to 101 trillion yen, a widely expected move that barely moved markets. "I take it as that the BoJ is carrying out what we sought during the election stepbystep," Abe told a party meeting. The incoming prime minister caused a brief stir when he said that BOJ Governor Masaaki Shirakawa had telephoned to inform him of the decision in the morning when the policy meeting was still taking place. The LDP later said the remark was a slip of the tongue and Shirakawa told a news conference he made the call in the afternoon, after the meeting was over. With the latest move, the BOJ has expanded asset purchases five times this year, the most frequent activity during a single year in a decade. The last time it eased so many times was in 2001, when Japan was battling a domestic banking crisis. "The next step is inflation targeting. The BOJ will come up with something that's just enough to avoid criticism from Abe but probably not enough to avoid some sense of disappointment," said Masamichi Adachi, senior economist at JPMorgan Securities in Tokyo. "Abe is not even prime minister yet. If you look at how the BOJ is behaving, you could argue this is a loss of independence." The BOJ now has a 1% inflation target in place, and defines a range of zero to 2% consumer inflation as a desirable level of longterm price growth. The central bank said it would review that guideline next month. It will probably clarify that, after 1% inflation is in sight, it will aim to achieve 2% inflation. Shirakawa admitted that Abe's request for setting a 2% inflation target was partly behind the central bank's decision to review its longterm price goal. But he warned that in doing so, the BOJ would ensure that its policy flexibility was protected and take into account the fact that Japan has long suffered from deflation even as other advanced economies experienced inflation. "We must bear in mind the fact that inflation has been low in Japan for a long time," Shirakawa told a news conference. Shirakawa has consistently argued that setting a 2% inflation target would be counterproductive in a country that has not seen consumer inflation exceed 1 % for most of the past two decades. But Abe made a rare, direct push for a higher inflation target when Shirakawa visited the LDP's headquarters on Tuesday, saying that the central bank must pay heed to the fact that he won an election campaigning for bolder monetary stimulus. Abe also said that once he takes over as primes minister on Dec 26 he would instruct his new cabinet ministers to begin working with the BOJ on setting a shared inflation target. - Reuters |
| The FBM KLCI snaps gain streak in early trade Posted: 20 Dec 2012 06:32 PM PST KUALA LUMPUR: The local market has snapped its gain streak in early trade as the benchmark FBM KLCI dipped into the red, in line with the regional markets. At 9.45am, the FBM KLCI slid 2.62 points to 1,667.98 points with 87.9 million shares done. In a report, HwangDBS Research said: "While there are no signs at all to suggest the world would come to an end today (21-12-2012), we suspect the short-term uptrend on our Malaysian bourse could be near its tail-end already. "Technically speaking, the benchmark FBM KLCI after a cumulative rise of 60-point or 3.7% since end-Nov will likely struggle to overcome its immediate resistance threshold of 1,670 ahead." In the regional markets, most Asian shares were in the red except Japan's Nikkei 225 which increased 0.14% o 10,051 points, Shanghai's Composite Index climbed 0.11% to 2,170.75 points. Hong Kong's Hang Seng declined 0.7% to 22,501.14 points, Singapore's Straits Times Index lost 0.19% to 3,169 points, South Korea's Kospi down 0.8% to 1,983.54 points while Taiwan's Taiex slid 1.13% to 1,645.24 points. The ringgit was stronger against the greenback at 3.0585. Spot gold shed 0.16% to US$1,645.24 per ounce. Nymex's crude oil was down 0.67% to US$89.53 per barrel. At the local bourse, losers outpaced gainers at 129 versus 107 while 157 counters were traded unchanged. Gainers were led by SHELL, up 23 sen to RM8.63, TWS climbed 15 sen to RM7.50 and TNLOGIS added 9 sen to RM1.75. Losers were LMCEMNT which shed 23 sen to RM9.41, AEONCR down 14 sen to RM12.50 while BAT declined 12 sen to RM60.38. Active stocks included OVERSEA, OPENSYS, SCOMI, XOX and SUMATEC. |
| Global report ranks Malaysia among the most ICT-enabled Posted: 20 Dec 2012 06:30 PM PST KUALA LUMPUR: Many of us have heard of the Global Competitiveness Report. It is an important barometer of economic competitiveness of the nations of the world and it highlights key issues and developments concerning the factors that affect competitiveness. However, few in Malaysia are familiar with the Global Information Technology Report (GITR). It is perhaps time that we acquaint ourselves better with the GITR. In fact, both the Global Competitiveness Report and the GITR are published annually by the World Economic Forum (WEF), which describes itself as "an independent international organisation committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas". Over the past decade, the WEF has been publishing the GITR series in collaboration with Swiss business school INSEAD. In the same way that the Global Competitiveness Report has developed into a well-accepted reference on economic competitiveness, the GITR is finding its footing as an in-depth and respected international assessment of the network readiness of world economies. It is aimed at measuring the degree to which economies across the globe leverage on information and communication technology (ICT) to increase their growth and overall competitiveness. The research provides a unique platform for public-private dialogue on best policies and for determining what actions will propel national ICT readiness and innovation potential. In the preface to the 2012 edition of the GITR, titled "Living in a Hyperconnected World", WEF chief business officer Robert Greenhill observes that the world has become increasingly hyperconnected over the past decade. "We live in an environment where the Internet and its associated services are accessible and immediate, where people and businesses can communicate with each other instantly, and where machines are equally interconnected with each other," he wrote. "This hyperconnectivity is deeply redefining relationships between individuals, consumers and enterprises, and citizens and governments; it is introducing new opportunities but also new challenges and risks in terms of individual rights and privacy, security, cybercrime, the flow of personal data, and access to information. As a result, our economies and societies will undergo fundamental transformations." He points out: "Mastering and leveraging these transformations to maximise the positive impacts and increase resilience against the risks that ICT can bring to the economy, society, environment, and healthcare are crucial for boosting economic competitiveness and well-being." A regional example So where does Malaysia stand in the IT arena? A key feature of the GITR is the Networked Readiness Index (NRI), which the report says offers "a comprehensive assessment of the present state of networked readiness in the world". In the NRI 2012, Malaysia is ranked 29th out of 142 economies, 8th out of 22 Asia-Pacific economies and 2nd in the Asean region. With an index score of 4.8 out of a maximum score of 7.0, it is placed among the top quartile of the world's most networked ready economies. In relation to the rankings of Asian-Pacific countries, it continues to be ahead of even China (9th, 4.11) and India (12th, 3.89). In the Asean region, Singapore (2nd in overall world rankings, with a score of 5.86) and Malaysia has the top two index scores. When referring to the limited economic and social impacts of ICT in some South-East Asian nations, the report says: "No doubt these countries could learn from Singapore and Malaysia, two Asean members that have been very successful at leveraging ICT." The WEF acknowledges that the Malaysian Government has been pursuing a long-term plan with the ambition to achieve high-income status by the end of the decade, with ICT playing a critical role. Most government-related indicators in the 2012 GITR report reflect this. For example, in the area of government usage of ICT, Malaysia is ranked 6th worldwide. This underscores the Government's prioritisation of ICT, the importance of ICT to the Government's vision of the future, and the initiatives by the Government to provide online services. These government-led efforts are a significant factor in ICT's transformational impact on the economy (Malaysia ranks 31st in this category) and on society at large (15th). Malaysia's environment for ICT is ranked 23rd (from 36th in 2011). This is derived from its political and regulatory environment ranking (24th) and business and innovation environment ranking (23rd). However, individuals and businesses in Malaysia need to step up to the plate to complement the Government's charge to drive ICT progress. Lessons from Taiwan The Readiness sub-index, which measures the degree to which a society is prepared to make good use of an affordable ICT infrastructure and digital content, is still an area of concern. Malaysia's rankings for the three pillars within this sub-index are 65th for infrastructure and digital content, 47th for skills, and 41st for affordability. Taiwan's performance in this aspect is something Malaysians should take note. The success of Taiwan, ranked 2nd among the Asian-Pacific countries, has largely been attributed to its Government's efforts to transform an agriculture-based and low-end manufacturing country into a major manufacturer of electronics and high-tech products as well as a key innovation hub. Malaysia can taste similar success if the people in Malaysian and its private sector can fully leverage on the public sector infrastructure and resources. For Malaysia to transition from a middle-income to a high-income economy, the continued development of the communications, content and infrastructure (CCI) sector through public and private sector efforts is fundamental. The CCI sector spans a wide ecosystem covering content, network applications, services and devices. In 2009, the sector contributed RM22bil of the gross national income (GNI) from telecommunications, TV, broadcasting, post and courier. The aspiration is to raise the sector's GNI contribution threefold to RM57.7bil in 2020. To achieve this, the Government has identified 10 national Entry Point Projects (EPPs) across three themes: Serving Tomorrow, Pushing Boundaries and Enhancing Foundation. Going upwardly mobile The first theme addresses the paradigm change of shifting profit pools from infrastructure and access to applications and content. This is to be done by strengthening Malaysia's domestic value-add in advanced services, particularly creative content creation (EPP 1), a new EPP named Track and Trace (to spur the use of radio frequency identification technology or RFID) and connectivity applications (EPP 3). Already, the new industry-led public-private collaboration to grow the export segment of the creative industry has seen almost a 30% increase in export revenue to RM337mil in the third quarter of 2011 compared to RM260mil in 2010. This EPP is expected to register further growth by end 2012 as 22,000 hours of digital content is estimated to be made available during the year. The impact of the Digital Malaysia Project championed by Malaysian Multimedia Development Corp (MDeC) is also expected to be further felt in the near future. As it is, 2011 proved to be a milestone year for mobile commerce in Malaysia. The total spent on mobile commerce grew from RM101mil in 2010 to RM467mil, representing a 370% jump in just one year. Of this, the Malaysian mobile commerce comprised about a quarter of all online shopping in 2011. By 2015, this market is expected to grow more than seven times to hit RM3.43bil, indicating that the nation is upwardly mobile in every sense of the word. Over the last couple of years, rapid introduction of mobile devices based on the Android and Apple operating systems have triggered a new way of looking at the consumption, creation and distribution of information. About one billion applications are downloaded every month globally. As per industry estimates, this app economy has created almost 500,000 jobs since 2007 in the United States alone. Malaysia, with seven million smartphones and 7.7 million mobile Internet users, has immense potential to participate in the new global app economy through the local development of innovative, ideas-led content. The second theme (Pushing Boundaries) fully leverages CCI in strategic sectors through coordinated efforts to provide access, devices, applications and content; while the third theme of Enhancing Foundations capitalises on next-generation infrastructure opportunities with a particular focus on coverage, affordability and quality of access for all Malaysians. The broadband-for-all mandate (EPP 7) targets access gaps (mostly in urban areas) by treating broadband as similar to other utilities such as water and electricity as a means for ensuring that all new residences will have ready access to broadband services. For rural dwellers, the access to broadband, computers and relevant applications are provided through extending reach programmes (EPP8). Achievements in these areas include increases in broadband household penetration from 60% in 2011 to 65% in 2012, reaching a total of 4.5 million households subscription, and bridging the digital divide by getting more rural communities online. In the first week of 2011, broadband household penetration was 56.2% and by December 2011, it grew to 62.3%. In addition, more than 1,300 villages across the country have been connected with wireless Internet services. Building a high-income, high-tech nation is the joint responsibility of all social actors in Malaysia; it is a mission not only for the Government but also for individuals and businesses. It is important for the country as a whole to leverage on ICT to increase our international competitiveness and economic well-being; using it as dynamic and strategic platform to enable the multi stakeholder interaction and action needed to further our progress on the global stage. |
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