11 December 2008 Newz Bits

December 11, 2008 at 1:41 am Leave a comment

HIGHLIGHTS

On Malaysia
· Genting Bhd has not finalised a potential joint venture with Chelsea Property
· MIER says unemployment rate may hit 4.5% in 2009
· Malaysia will sell palm biodiesel at domestic fuel pumps by January 2010

On The Global Front
· Demand for Chinese exports shrinks 2.2% in November, largest drop since April 1999
· China’s wholesale price inflation collapses in November
· US EIA: Global oil demand will contract this year and next
REPORTS
· SP Setia – 4QFY08 results (Hold; RM2.91; TP: RM2.62)
· SapuraCrest – 3QFY09 Results (Hold; RM0.735; TP: RM0.72)

Genting Bhd (GENT MK, Buy, TP:RM 6.10) has not finalised a potential joint venture with US-based Chelsea Property to build shopping malls in Malaysia, the property unit of the company said yesterday. In a filing with the stock exchange, Asiatic Development, a 53.8%-owned unit of Genting said that a feasibility study of the potential joint venture was still ongoing. Genting said in January it had signed a memorandum of understanding with the Chelsea Property Groups to jointly study the feasibility of setting up outlet malls across Malaysia, including Johor. (Financial Daily)
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Sunway Holdings Bhd (SGW MK, Buy, TP:RM0.92) has changed its financial year end to December 31 from June 30 to coincide with the year ends of its units based abroad as their contributions are rising due to the group’s expansion plan. The next audited financial statements shall be for a period of 18 months, from July 1 2008 to December 31 2009. (BT)
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The unemployment rate next year may hit 4.5% compared to about 3.5% this year amid the global economic downturn, according to the Malaysian Institute of Economic Research (MIER). Executive director Professor Emeritus Dr Mohamed Ariff Abdul Kareem said in the 3Q08, the number of jobless Malaysians stood at 12,000. He also added that 4.5% is considered high by Malaysian standard. (BT)
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New issuance of corporate bonds has dropped dramatically this year as the bearish economic outlook quells the sentiment of issuers and investors alike. According to Bond Pricing Agency Malaysia Sdn Bhd chief operating officer Meor Amri Meor Ayob, the lack of confidence and limited visibility over the next six months are keeping companies away from the private debt securities (PDS) market. On the demand side, investors’ interest is deterred by rising default risk amidst the gloomy economic environment. Meor Amri said “the old formula” of the Government taking the lead would help recapture interest, as the public spending would increase the velocity of money. (StarBiz)
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Malaysia will sell palm biodiesel at domestic fuel pumps by January 2010, Plantation Industries and Commodities Minister Datuk Peter Chin said. He said the Government was in talks with independent power producers (IPPs) on burning palm oil as biodiesel. By January 2010, palm biodiesel will be available at all the pumps nationwide. He declined to say how much palm oil
the IPPs, which include YTL Power International Bhd, Sime Darby Bhd, Tanjong Plc and Malaysian Resources Corp Bhd, could use as biodiesel. Malaysia expected to use 500,000 tonnes of CPO for transport and industries in 2009, Chin said. (StarBiz)
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Stocks rallied Wednesday, Dow Jones industrial average added 0.8%, as investors welcomed reports that Congress and the White House have struck a deal to provide a $14bn bailout to the struggling auto industry. Stocks rallied through the early afternoon in response to the auto bailout news, lost steam after the release of the November Treasury budget, and then recharged the advance near the close. The Treasury budget widened to $164.4bn last month from $98.2bn in the previous month, versus forecasts for a $171bn gap. The budget deficit now totals $401.6bn in just the first two months of the fiscal year, October and November. The budget deficit for all of fiscal year 2008 was $455bn. (CNN Money)
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The US Treasury Department on Wednesday reported that $164.4bn was added to the federal budget deficit in November, bringing the total deficit for the first two months of the fiscal year to $401.6bn. By comparison, the budget deficit for all of fiscal year 2008 was $455bn, according to the Treasury. Two key reasons for the steep deficit increase: the financial stabilization efforts undertaken by Treasury this fall and a decline in tax receipts. Budget experts have projected that
the federal deficit for this fiscal year, which began Oct. 1, will approach $1trn. But that number doesn’t count the effects of an economic recovery package that Congress is expected to pass early next year. (CNN Money)
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The US Commerce Department says wholesalers, reduced their inventories by 1.1% in October, the biggest cutback since a similar drop in inventories in November 2001. Wholesalers cut back on their inventories in October by the largest amount since the period following the 2001 terrorist attacks while they watched their sales plunge by a record amount. (CNN Money)
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The U.K. government and central bank are considering plans to pump billions of pounds into the economy as the bank rescue package and the lowest interest rates since 1951 fail to halt a slide into recession. The Bank of England and the Treasury are weighing a strategy known as “quantitative easing” where authorities increase money supply to boost bank reserves. The initiative was last used by Japan at the start of the decade. Prime Minister Gordon Brown’s government is frustrated that banks are rationing credit after tapping the Treasury for cash and guarantees to prop up their own balance sheets. Policy makers both in the U.K. and the U.S. Federal Reserve are looking beyond traditional interest-rate tools to revive the economy. (Bloomberg)
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Economies in East Asia will slow substantially in 2009 as the credit crisis depresses capital flows, exports and investment despite government attempts to boost domestic demand, the World Bank said yesterday. In its semi-annual report, the World Bank predicted, however, the East Asian region will a less severe slowdown than Europe, Central Asia or Latin America, which are similarly exposed to international trade and finance. Economic growth in East Asia, excluding Japan, will slow to 5.3% in 2009 from a projected 7% this year, while China’s growth could ease to 7.5% in 2009 from 9.4% in 2008, the World Bank said. According to the World Bank, direct government spending at this point is likely to be a superior option to boost economic activity. (Financial Daily)
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Demand for Chinese exports of everything from furs to furniture shrank precipitously last month, sending a chill through the workshop of the world. Chinese exporters have been left staggering, as the global financial crisis in 2H08 battered their main markets in Europe and the United States. The value of China’s exports was 2.2% lower in November y-o-y, customs data showed yesterday, the largest such drop in Chinese exports since April 1999. (Financial Daily)
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China’s wholesale price inflation collapsed in November, undershooting expectations by a wide margin and raising the risk that the once-sizzling economy could find itself mired in deflation before long. Producer price inflation fell to 2.0% in the year to November, well down from October’s reading of 6.6%, the National Bureau of Statistics said yesterday. The remarkable
slackening of inflation has given policy makers a wide berth to cut interest rates and use fiscal spending to revive the economy. But with China already having slashed rates and announced a 4trn yuan (US$580bn) stimulus package, concern is turning to whether these measures may prove too little, too late. China’s leaders are meeting this week to map out economic policy for
next year, with the government struggling to shore up growth and jobs. (Financial Daily)
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Global oil demand will contract this year and next for the first time since the early 1980s as the world economy slows to a near standstill, the US government said on Tuesday. World oil demand will fall by 50,000 barrels per day (bpd) in 2008 and 450,000 bpd next year, the US Energy Information Administration (EIA) said, led by a 1.2m bpd contraction in top consumer the United States this year and a further 200,000 bpd drop in 2009. This triggered a nearly 4% slide in crude oil futures on the New York Mercantile Exchange on Tuesday. The lower demand forecast came as the EIA revised down its projection for 2009 global economic growth to 0.5% next year, from the 1.8% projection it made in its previous report issued in November. (Financial Daily)
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SP Setia 4QFY08 : Going back to basics December 11, 2008 Daily Highlights

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