The cost of building KLIA2

KLIA2 has been finally launched and there's been a lot of buzz ever since. It faced a tonne of trials and setbacks, but on 2 May 2014, the doors of the airport finally opened to the public, offering its services of an aero-bridge, state-of-the-art facilities and shopping areas.
It's definitely a fancy airport with hotels and rail services to get in and out of the terminal. But all that fancy convenience tend to come with an equally fancy price tag. So how much did it cost to build KLIA2 (and can we really afford to have done it)?

KLIA2 Gateway

The mounting costs
There was a lot of back and forth over cost even before KLIA2 was open, as their initial estimation of building KLIA2 was clearly overshot. In July 2007, it was announced that KLIA2 would cost RM1.7 billion. Then it was increased to RM2 billion in March 2009, and then RM2.5 billion in October 2010. The final cost, which has shocked many, turned out to be RM4 billion with more costs to be expected such as the RM100 million to build an Express Rail Link (ERL) between KLIA and KLIA2. The final cost being more than double the estimation caused quite an uproar, with many demanding to know what had happened along the way.
Chairman of the Public Accounts Committee (PAC), Datuk Nur Jazlan Mohamed, explained that the higher building cost was due to the changes in the aviation industry. He said KLIA2 was initially designed for 25 million travellers, but was now changed to accommodate 45 million travellers after a forecast by the International Air Transport Association Industry (IATA) showed that there will be a demand for low-cost travel options. This caused the size of the terminal to be expanded, meaning other parts such as the aerobridge and baggage handling system also had to be enlarged.
This has caused popular low-cost airline AirAsia to be hesitant to join KLIA2 as they feared they would be unable to keep their rates low with the new airport. AirAsia believes that they would have to raise their prices and that would affect the market that they have been targeting all this time.
Cracks appearing
RM 4 billion was spent to build a state-of-the-art airport supposedly for budget airlines. When put together that way; the plan can sound disingenuous to some. But even if this was a necessary project for the overall development of the country’s economy and infrastructure – shouldn’t RM4 billion be enough to afford some amount of workmanship guarantee?
It was in the news some days ago that KLIA 2 was showing sinking aircraft parking bays and bumpy taxiways just a few weeks after opening. In February, reports of cracks in the tarmac were patched up and although some news sites were quick to dismiss the cracks as ‘standard’ due to piping, it does give one cause for concern. We’ve spent billions of ringgit – is this the standard amount for building something that cracks and depresses within weeks?

Can it still be low-cost?
Malaysia Airports (MAHB) has given the assurance that as of now the charges at KLIA2 would remain the same as LCCT's, though this came with a qualifier in that the moratorium on cost increases would only be for a year. But beyond that, it would be up to the government to decide whether or not there would be higher charges in terms of airport tax and the likes for those who travel on low cost carriers.

But the high cost of building and operating the new terminal has already forced AirAsia to include an additional RM3 fee passed on to consumers booking tickets with them. So, not only did the new airport cos Malaysia Airport Holdings Berhad (MAHB) a veritable king’s ransom – it’s going to cost budget travellers too.

On their website, the airlines explained what the fee is and why they are forced to charge it. In response to why the fee is charged, the website explains: “klia2 Fee is charged to offset the mandatory klia2 facilities charges imposed by the airport authority.” RM3 is not a princely sum by any means but who’s to say where such additional fees will end? It’s as clear as the Klang River at present if anymore charges will be added and how many other airlines may start including such fees to offset the cost “imposed by the airport authority.”
Though many who have seen the new airport commend its snazzy exterior and facilities – it remains to be seen whether the RM4 billion was truly money well spent.

source:yahoo

Poland: NATO should send troops to east Europe, ignore Russia's objections

WARSAW (Reuters) - Russia's military intervention in Ukraine's Crimea peninsula makes it vital that NATO station significant numbers of troops in eastern Europe and ignore any objections Russia might have in this respect, Poland's defence minister said.
Tomasz Siemoniak, in an interview with Reuters, said western Europe was safe thanks to the U.S. military presence there, adding that Russia's military was ready to intervene in Poland's neighbour, Ukraine.
Russia's annexation of Crimea has caused the deepest crisis in East-West relations since the Cold War and raised fears in the region's NATO members, including Poland, about their own security.
"Threats are still present in Europe," Siemoniak said. "We believe that NATO should not be limited in anything which concerns the security of its members."

NATO presented satellite photographs last week it said showed Russian deployments of 40,000 troops near the Ukrainian frontier ready for action.
"If troops are on the border and Russia's law allows, contrary to international law, a possible intervention, then one has to fear that such an intervention may take place," Siemoniak said.
NATO has suggested it is more likely to beef up eastern European security through rotating reinforcements rather than permanently basing substantial additional combat forces there.
Poland, whose army is dwarfed by nuclear-armed Moscow, is calling for the permanent presence of NATO forces in Poland.
Such calls are opposed by Russia, which says deployment of significant NATO forces in eastern European countries close to Russia would violate the 1997 Founding Act, a cooperation agreement between Moscow and the alliance.
But Siemoniak said the agreement was no longer binding after Russia violated international law by grabbing part of Ukraine's territory.
"To be effective, NATO needs to have the capacity. It needs to have it also in eastern Europe," he added. "Hence, one should not treat this limitation as binding."
Siemoniak is travelling this week to the United States to discuss deepening military co-operation with Defence Secretary Chuck Hagel. A potential NATO base in Poland will be one of the topics, Siemoniak said.

The top 5 most expensive video game failures

The video game industry shows no signs of slowing down, especially after raking in US$66 billion with the recent release of the latest consoles being the Playstation 4 and XBox One. But just because it's a growing industry, it doesn't mean that game developers have it easy especially when hardcore gaming fans take each and every game release seriously. If you don't please the gamers, you can expect the game to end up in the landfills where they will remain. Here are the five expensive video game failures that ended up just like that.

1) E.T. the Extra Terrestrial (1982)
Developer: Atari
Result: Bankruptcy of Atari in 1983

E.T. the Extra Terrestrial

1982′s E.T. the Extra Terrestrial will forever be known as the game that was so bad, it murdered Atari. In an effort to capitalise off the popularity of Stephen Spielberg’s 1982 summer blockbuster of the same name, Atari paid a whopping USD25 million in licensing rights to produce the game.
Subsequently, Atari insisted that the game be completed for a Christmas release of the same year, leading to a rushed development of only 5 months. Rome wasn’t built in a day, so suffice to say, the same concept probably applies to video games as well. Reception for the game was overwhelmingly negative with players blaming the poorly constructed levels and patchy graphics among others.
Anticipating another mega hit, Atari had decided to ship over 5 million units of the game to satisfy demand. The subsequent negative reaction led to poor sales and returns, resulting in Atari allegedly dumping millions of unsold game cartridges in a New Mexico landfill, though this urban legend remains unverified (unless you want to grab shovel and check). The failure of the game ultimately cost the company millions and contributed greatly towards the downfall of Atari in 1983.
2) PAC-MAN (1982)
Developer: Atari
Result: Bankruptcy of Atari in 1983

Pac-Man

Unless you’ve been living in North Korea your entire life, you’ve probably heard about PAC-MAN. PAC-MAN was released in arcades by developer NAMCO back in 1980, growing into a global smash hit soon after. Thousands of kids from around the world stuffed their pockets full of quarters and lined up at arcades just to get a go at PAC-MAN.
Hoping to turn a profit off the success of the arcade version of PAC-MAN, Atari attempted to port the game into the Atari 2600 home game console. The porting of an already successful game seemed like a sure-win recipe for Atari so the company ordered over 10 million units of the game produced to cater demand. Unfortunately, technical difficulties resulted due to the significantly lower memory space of the Atari 2600 leading to developers having to alter both graphics and game-play in a desperate attempt to meet the tight deadline.
As expected, the changes did not bode well with many of PAC-MAN ‘s hardcore fans expressing sheer disappointment towards the “abomination” created. In the ensuing chaos, Atari ended up with millions of unsold cartridges sitting in their warehouse. The failure of the game coupled with the disaster of the aforementioned E.T. game hammered the final nail in the coffin of Atari. Reporting a loss of over USD500 million in 1983, Atari was effectively finished.

3) Duke Nukem Forever (2011)
Developer: 3D Realms/Gearbox Studios
Result: 3D Realms losing an estimate USD20 million

Duke Nukem Forever

The game follows the adventures of Duke Nukem, a self-absorbed macho anti-hero with a loud mouth and a really, really big gun. The game pans out like your stereotypical gun slinging shooting game, as players guide Duke through the ruins of post-apocalyptic Earth, blasting aliens and mouthing them off. Being the fourth game in the “Duke Nukem” series following the highly successful and critically acclaimed Duke Nukem 3D, anticipation for the game was at an all-time high.
Duke Nukem Forever first entered development back in 1996 and in touch of cruel irony, pretty much took “forever” to get released. Duke Nukem Forever’s time in “development hell” was largely due to disagreements by management over the game’s platform engine, which changed multiple times over the course of development. Programmers had to constantly restart work from scratch every time management decided to change platform engines, leading to a severe backlog in progress. The slowdown eventually lead to the game being picked up by Gearbox Studios after the original creators, 3D Realms, fell into financial disarray.
While the game was eventually released after 15 years in development, reviews were lackluster with many fans lampooning the poorly constructed game-play. The lengthy delay is estimated to have cost 3D Realms at least USD20 million over 15 years.

4) Daikatana (2000)
Developer: Ion Storm
Result: Bankruptcy and Subsequent Closure of Ion Storm

Daikatana

Daikatana, a Japanese term, literally translates into “Big Sword”. As you’ve probably guessed, the game involves controlling a samurai master on a vendetta as he brings his really sharp sword around town slicing through everything from ninjas to tomatoes. The game was the brainchild of John Romero, a famous video game developer known for creating several popular game titles in the mid-90s.
Due to John Romero’s involvement, the game was heavily hyped by development company Ion Storm. The massive advertising campaign carried out by the company drew heavy criticism due to the use of highly offensive tag lines such as “John Romero’s about to make you his bitch”. As a result of the expensive advertising costs plus significant delays in the market release of the game, Ion Storm is estimated to have blown at least USD44 million on production costs.
When Daikatana was finally released in 2000, the game was widely panned by critics for its poor graphics and confusing game-play. Eventually, despite the hype, Daikatana failed to deliver and only sold approximately 200,000 units. The poor sales of Daikatana eventually led to the closure of Ion Storm and a very public apology from John Romero.

5) The Last Express (1997)
Developer: Smoking Car Productions/Brøderbund
Result: Closure of Smoking Car Productions and Sale of Brøderbund due to financial difficulties

The Last Express

1997′s the Last Express sets itself apart from other games on this list as the only game to get rave reviews from players yet lose money financially. The premise of the game takes place in the early 1900s before the outbreak of the First World War and plays out like a mystery novel with players taking control of Robert Cath, a passenger aboard the Oriental Express. The game featured multiple endings dependent on the player’s choices accompanied by cutting edge graphics for the time.
So if The Last Express was such an amazing game, why did it fail? Unlike Daikatana, which was plagued by too much advertising, The Last Express suffered from too little advertising. Brøderbund, the company charged with marketing the game, suffered a massive walkout a mere weeks before the scheduled release of the game. While the game was eventually released, no one knew about it due to the lack of advertising. This led to the Last Express selling a mere 100,000 copies, far below the minimum amount required for the company to break even.
The failure of the Last Express led to the closure of the game’s developer, Smoking Car Productions and subsequent sale of Brøderbund due to financial difficulties. Months later, The Last Express was eventually yanked from shelves.
With the recent release of the new gaming consoles and new game releases being announced in the near future, would we be seeing more games that could possibly be in this list? Only time will tell.

source

Turkey says Twitter agrees to close some accounts, no tax deal yet

ISTANBUL (Reuters) - Twitter (TWTR.N) will close some accounts in Turkey but will not for now set up an office there as the government wants, a senior Turkish official said late on Monday after talks over a dispute which saw the government ban the site for two weeks.

Prime Minister Tayyip Erdogan's government blocked Twitter and YouTube (GOOGL.O) in March, drawing international condemnation, after audio recordings, purportedly showing corruption in his inner circle, were leaked on their sites.

The Twitter block was lifted 11 days ago after the constitutional court ruled that it breached freedom of expression, a decision Erdogan has since said was wrong and should be overturned. YouTube remains blocked in Turkey.

Some accounts about which Turkey has complained will be closed and a more formal mechanism established under which Twitter will consider Turkish court rulings on other accounts, the official at the prime minister's office said.

But there was no immediate deal to open a Twitter office in Turkey or for it to pay Turkish tax, two of Ankara's key requests, in the first direct talks since the ban.

"The two sides understood each other fully after the presentations, and a decision was made to establish a system for cooperation in the future," the official said.

"Some accounts will be closed. At this stage Twitter will not immediately establish a company but the necessary communication will be established via lawyers in Istanbul."

There was no immediate comment from Twitter.

The Twitter delegation, led by its head of global public policy Colin Crowell, held talks on Monday with officials from the prime minister's office, the communications ministry and telecoms authorities.

The Turkish official said Twitter had implemented three important court rulings and said it would enact several other decisions within a week, while it considered the other issues.

"Twitter is not categorically against opening an office in Turkey and expressed this clearly. It will now conduct work and it will be determined whether Twitter will pay tax by the time it forms a company. Twitter said that if it needs to pay tax it will fulfil this responsibility," he said.

Finance Minister Mehmet Simsek told a news conference on Tuesday that all social media companies operating in Turkey must open representative offices in the country.
The government estimates Twitter generates $35 million a year in advertising revenue in Turkey, none of it taxed locally.
Access to the service was blocked on March 21 in the run-up to local elections to stem a stream of leaked wiretapped recordings. Erdogan said he would "root out" the network.
Tech-savvy Turks quickly found workarounds, and the company itself published a tweet to Turkish users instructing them on how to continue tweeting via SMS text message.

Turkey has said it wants the removal of tweets it considers harm national security, the privacy of individuals and personal rights, and wants Twitter to hand over the IP addresses of those accounts which it views as a threat.

source

World stocks mostly down on Ukraine, China jitters

World stocks mostly down as Ukraine tensions bubble, doubts surface over China growth

TOKYO (AP) -- World stock markets were mostly lower Tuesday as Ukraine tensions continued to bubble and jitters about China's economy resurfaced.

Hong Kong's Hang Seng was down 1.6 percent at 22,671.26 as a drop in China's money supply unnerved investors ahead of first quarter economic growth figures due Wednesday. China's Shanghai Composite Index shed 1.4 percent to 2,101.60.

China's leaders are targeting growth of 7.5 percent this year for the world's second-biggest economy. But exports and imports have been weak in the first quarter, suggesting the economy is slowing and raising the risk of job's losses. China's growth of 7.7 percent last year tied 2012 for the slowest since 1999.

In early European trading, France's CAC 40 was down 0.3 percent at 4,371.80 and Germany's DAX fell 0.7 percent to 9,275.32. Britain's FTSE 100 shed 0.2 percent to 6,568.48.

Futures augured a down session on Wall Street. Dow Jones and S&P 500 futures were both down 0.1 percent.

Global stock markets suffered last week over concerns that technology stocks are overvalued and nervousness about the crisis in the Ukraine.
In the latest Ukraine development, two pro-Russian politicians have been attacked by pro-Ukrainian activists in the capital Kiev as tensions grow over unrest in eastern parts of Ukraine, where pro-Russian gunmen have seized government buildings in nearly 10 cities.
Ukrainian and Western officials have accused Moscow of instigating a pro-Russian insurgency in eastern Ukraine. That raised the prospect of more sanctions against Russia, possibly affecting the valuable energy trade.

In Asia, South Korea's Kospi fell 0.2 percent to 1,992.27 while Japan's Nikkei 225 gained 0.6 percent to close at 13,996.81. The dollar holding close to 102 yen levels also helped underpin Tokyo share prices. A weak yen is a plus for many Japanese companies because they rely on exports.

Stock markets in Southeast Asia were mostly higher and Australia's S&P/ASX 200 gained 0.6 percent to 5,388.20.
In addition to China's GDP figures, analysts said players were cautious ahead of key data and news in coming days including U.S. consumer prices and a speech by the Federal Reserve Chair Janet Yellen.
"No one is likely to get too carried away given the spate of potential game changing data and announcements pending in the next 48 hours," William Leys, sales trader at CMC Markets in Sydney said in a report.
The dollar was trading at 101.88 yen, inching up from 101.83 late Monday. The euro fell to $1.3799 from $1.3823.

Benchmark U.S. crude for May delivery was down 90 cents at $103.15 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 31 cents Monday to settle at $104.05.

source

Samsung delays new Android model release after Jobs's death

SEOUL: Samsung Electronics Co said on Monday it had delayed the launch of a new smartphone based on Google's latest version of Android operating system while the world paid tribute following the death of Apple cofounder Steve Jobs.
The delay also comes as intensifying legal battle between Apple and Samsung is set to reach the most crucial moment this week, with the two technology giants set to meet in courtrooms in the United States, the Netherlands, Australia, South Korea and Japan.
Samsung had planned to introduce the new product based on the Ice Cream Sandwich system, which will unite the Android software used in tablets and smartphones, at its Mobile Unpack event in San Diego on Tuesday.
"We decided it was not the right time to announce a new product while the world was expressing tribute to Steve Jobs's passing," a Samsung spokesman said. Samsung has yet to decide on a new date for the release, the spokesman said.
Jobs died on Wednesday following a yearslong battle with pancreatic cancer, and tributes from world leaders, business rivals and fans have poured in since.
Samsung and Apple are suing each other in 10 countries over 20 cases since April, but few of them holding as much significance as the California court ruling on Thursday, since it could affect Samsung's mobile device sales in the United States, one of its biggest markets.
Samsung said it has no plan to delay scheduled hearing dates due to Jobs's death. Less than a day before his death on Wednesday, Samsung widened its patentinfringement cases with the U.S. firm to ban the sale of Apple's new iPhone in France and Italy after a series of setbacks in Australia and Europe.
Apple says Samsung's Galaxy line of mobile phones and tablets "slavishly" copied its iPhone and iPad. Samsung rejects the claims and argue the U.S. firm infringed on its mobile patents.
Samsung is the most credible challenger to Apple. It said on Friday its quarterly profit should top the most bullish market forecasts, with smartphones becoming its main profit engine despite intense competition from bigger rival Apple.
Apple unveiled its latest iPhone last week, leaving investors and fans wishing for more than a soupedup version of last year's device at a time of heightened competition from rival smartphone makers.
But U.S. mobile carrier AT&T said on Friday it has seen "extraordinary demand" for the new iPhone with over 200,000 preorders in the first 12 hours.
Last week, Apple rejected an offer from Samsung to settle a tablet computer dispute in Australia, possibly killing off the commercial viability of the new Galaxy tablet in that market.
Samsung is the biggest maker of mobile phones that are based on Android, which is available for free to handset vendors such as Motorola Mobility and HTC Corp.
Android phones have a greater combined market share than Apple's iPhone, the world's bestselling smartphone.
Shares in Samsung were trading up 2.2 percent by 0025 GMT, versus a 0.8 percent rise in the wider market.

Do Dato Seri Najib ETP plan can help preparad Malaysia to face second world recession?

I just cant say much, but i believe goverment got plan to face second world recession.
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Malaysia Prepared To Face Global Economic Downturn

GEORGE TOWN, Sept 24 (Bernama) -- Malaysia has made several preparations to face the world economic downturn following the European debt crisis and the falling US economy.

Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop said the country was prepared to face the long term effects having put in place several various strategies.

"We have taken several strategies and plans to ensure that Malaysia's economy can continue to expand although the world is facing a downturn."

Malaysia would not be affected if the world's economic recession is for a short period but if the downturn continues, there is possibility that Malaysia would be affected as well, he nevertheless told reporters after attending a Hari Raya gathering organised by the Bumiputera Economic Planning Unit here Saturday.

Nor Mohamed who is responsible for the Economic Planning Unit, however did not disclose the strategies and plans taken by the government to face a global economic recession.

The minister, who is also Member Parliament for Tasek Gelugor, said he was confident that the current economic downturn would not jeopordise the country's economy in the short term.

"Malaysia should also be able to still defend its economic position being more reliant on Asian economies such as China and India."

He also said Malaysia's domestic demand was expected to lessen the effects of the ongoing uncertainties in the global economy.


Source: Bernama

No Competition Said Malaysian Competition Commission (MyCC)

There will be no evil competition erm a debate will see either this MyCC can handle such problem.
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Malaysia Competition Commission chairman, Tan Sri Siti Norma Yaakob, answers...
1. What is the first priority of the Malaysian Competition Commission (MyCC) and for you as chairman?
To ensure that I have a full functioning Commission, the right kind of people with the right kind of attitude to run it as well as to put in place the necessary standard operating procedures to ensure transparency, accountability and intergrity.
2. Government-linked companies (GLCs) hold a lot of market power. Would they tend to contravene the spirit of competition?
The law does not exclude GLCs. Having market power by itself is not an offence, but if these GLCs do abuse their position because they have market power then MyCC can begin investigation or even the public can lodge a complaint against them. The country is moving towards an era of a more competitive environment. Competition culture must be embraced by all and sundry including the Government.
3. Would the commission look at the deal between Malaysia Airlines and AirAsia as arguments have been made that the deal breeds anti-competition?
Alliance is neither a joint venture nor a merger, but its effects on competition could be the same as those of any agreement between two parties competing in the same market. There will be positive and negative effects and we will follow the developments closely to see if any anti-competitive activities or agreements arise from it the post alliance effects.
4. Is there a model the MyCC will follow?
Much of the law is based on the EU law, and some on the UK model. We will study the decisions that have been made on several cases in these two jurisdictions, but of course, every jurisdiction differs geographically and economically and any decision taken will have to consider these two important elements.
5. What is your and the commission's strategies in ensuring fair competition is practised in the marketplace?
We will continue with advocacy programmes to ensure businesses are well informed of the law. And probably our first case would have to demonstrate the economic harm that is brought about when there is an anti-competitive practice in the market.
6. Is the anti-competition spirit in Malaysia entrenched and how difficult will it be in dismantling that?
I can say that the way businesses have been carried out in Malaysia clearly indicates high degrees of anti-competitive practices. Price fixing and market sharing have been a way of life in the business arena not only in Malaysia but all around the world. It is very much part and parcel of the business culture. I must say it is a real challenge, and anti-competitive practices must be weeded out so that Malaysian consumers are provided with good quality products and services at the right prices.
7. Does the MyCC have the mandate, especially in terms of political will, to ensure competition is preserved?
It has taken almost 19 years to get the support and political will to get the law passed in Parliament. That speaks for itself.
8. Is it fair to have exemptions to the Competition Act especially for industries that have their own regulatory authority?
Every jurisdiction that has the law has provisions for exemptions. To be realistic there are areas where industry specific treatment has to be given. Industries that have their own regulatory authority have been excluded simply because they have their own set of regulations on competition. But that does not mean all the activities under the sector are excluded. For example in the telecommunication sector, only the activities which are licenced under the Multimedia and Communications Act are excluded. All other activities are subject to the Competition Act 2010.
9. How will the MyCC enforce the law when it comes to deals that breed less competition and what are the limits of the commission?
All activities that are anti-competitive in nature are subject to the law. In terms of administrative priority, we will focus on agreements and conduct that are likely to or potentially have great impact on the welfare of consumers.
10. Will the MyCC review existing agreements that are deemed anti-competitive or will it act when a complaint is made?
It will only act when a complaint is made or when MyCC, as a watchdog, stumbles upon an anti-competitive behaviour.

Source: The Star

Inflation rise up to 3.3%: So what will Dato Seri Najib action?

The inflation is up at it peak which nearly 3.3% so will Najib do something to curb this phenomena? Let us wait for his budjet on 7 Oktober 2011 so will Najib budjet will give a look in inflation or indirectly the stock market.
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Latest figures in line with views that inflation had peaked in June
PETALING JAYA: The consumer price index (CPI) accelerated by 3.3% year-on-year in August, on higher prices for miscellaneous goods and services, recreation services and culture as well as housing, water, electricity, gas and other fuels.
According to the Statistics Department, the CPI for the first eight months of this year increased by 3.1% to 102.8 (compared with 99.7 in the same period last year).
When compared with July, the CPI in August increased by 0.2%.
Economists noted that this was in line with their view that inflation peaked at 3.5% year-on-year in June, before moderating slightly to 3.4% in July.
A Credit Suisse report estimated that inflation was flat in August on a seasonally adjusted basis.
“We expect year-on-year inflation to hover around 3.3% to 3.4% in the next few months before slowing to 3.2% by end-2011,” said Credit Suisse.
The report said inflation was likely to fall below 3% in the first half of next year, and could fall more rapidly than expected if the global growth outlook worsened.
Credit Suisse also noted that there could be a risk of a higher inflation rate due to the ringgit which has depreciated by over 5% against the US dollar since early September.
“It is too early to adjust our inflation forecasts at this stage. History suggests that it takes much bigger foreign exchange moves than we have seen so far to have a meaningful impact on Malaysian inflation,” said Credit Suisse.
However, Barclays Capital maintained its view that the ringgit would appreciate to RM2.90 in six months and RM2.84 in 12 months against the US dollar.
“We see several signs that elections may be brought forward and could be held well before the end of the year. We believe this would be a catalyst for the ringgit's strength,” Barclays Capital said in a note.
Barclays Capital also pointed out that risks to food prices were biased on the upside in the near term.
“Recent flooding in northern Malaysia, particularly in Perlis, is likely to weigh on rice and other food production, which could keep pressure on food prices in the near term,” it said.
Barclays Capital also pointed out that the contribution of non-food inflation remained sticky.
“The stickiness in non-food prices is largely due to persistent increases in recreation, health and miscellaneous services,” it said.
Bank Islam Malaysia Bhd chief economist Azrul Azwar said the CPI should continue to ease further until next year due to reduced pressure from food and fuel inflation.
“The balance of risks has tilted towards concerns about slower economic growth rather than uncontrolled inflation,” Azrul said.
He pointed out that there should be no movement in the overnight policy rate, which was presently at 3%, until the first half of next year.

Source: The Star

Regional hopes: China growth can Malaysia get the economic blessing ?

China growth seem give the region especially  Asia a strong fundamental economy however can this helping Malaysian stock market in term of stock market investing ??
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China growth prospect allows regional bourses to regain some of their lost ground
KUALA LUMPUR: Regional markets clawed back some of their lost ground as investors found signs of hope in economic indicators that signalled growth in China amidst economic uncertainties in Europe and the United States.
The local bourse's benchmark FTSE Bursa Malaysia KLCI rose 0.59% or 8.4 points to 1,419.04, led by gains in blue-chip stocks including Sime Darby Bhd, Genting Malaysia Bhd and CIMB Bank Bhd.
Gainers outpaced losers 350 to 289 while 287 counters were unchanged. A total of 709.05 million shares were traded with a turnover of RM1.15bil.
Sime Darby was the biggest contributor buoying the key barometer the counter surged 33 sen to RM8.24 with 9.47 million shares changing hands.

A man looking at a stock quotation board outside a brokerage in Tokyo. The Nikkei 225 index added 0.23% to 8 ,741.16 points yesterday. — Reuters

Investors continued to buy aggressively into the plantation giant with its current valuations deemed to be too compelling for analysts to resist.
Markets in Asia staged a rebound yesterday, with China's Shanghai A Index closing up 3.02%, or 81.17 points, to 2,512.96 on renewed optimism that growth prospects are still intact for China.
Singapore's Straits Times Index edged up 0.39% to 2791.79 points, Tokyo's Nikkei 225 added 0.23% to 8,741.16, Hong Kong's Hang Seng Index shed 1.0% to 18,824.17 and Seoul's Kospi Index gained 0.89% to 1,584.28.
Gains were limited as investors stayed on the sidelines ahead of the Federal Open Market Committee (FOMC) meeting that will set the tone for the rest of the year.
The two-day extraordinary meeting would be the most important event of the week as the Fed decides on the direction of the US monetary policy amid a staggering global economy that is slowly moving into stagnation.
Analysts believe that markets would weaken further if the Fed shows no signs of acting that will help spur the faltering US economy.
“The Fed is likely to step in to repair the economy. The question is the extent of the impact arising from the various financial tools at their disposal,” said a fund manager.
Expectations still abound that the Fed is likely to introduce a third round of quantitative easing to drive the economy forward.
“The FOMC is likely to decide on some kind of monetary easing,” SMBC Nikko's Hiroichi Nishi said in a Bloomberg report yesterday.
He said investors would limit their trading as they wanted to see how US stocks would react to the decision.
The prevailing uncertainty also saw spot gold rising to near US$1,810 per troy ounce while silver gained 64.5 US cents to US$40.43.
Meanwhile, the International Monetary Fund revised its world economic growth forecast to 4% for this year and next, down from its June forecasts of 4.3% for 2011 and 4.5% for 2012.
Its US growth projection for 2011 was also lowered to 1.5% from 2.5%.
As at press time, US futures were seen edging higher, indicating bullish sentiments ahead of announcements by the Fed.
While European markets saw a decline with authorities planning a review on Greece's economy, the euro was mixed against a basket of 10 Asian currencies, with the ringgit weakening against it.

Source: The Star

No more Firefly !! AirAsia is doing monopoly !!

The word monopoly is a true cruel in this market especially stock market and yet this play important aspect in playing the stock market. This made happen in MAS and AirAsia shares deal recently. So this is good or bad?
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Scant details on MAS-Firefly deal
PETALING JAYA: There seems to be very little known about Malaysia Airlines' plan for existing budget carrier Firefly Sdn Bhd and its new proposed airline Sapphire.
A spokesman for the national carrier told StarBiz that following the initial announcement on Aug 9, it was too premature to provide further information and that more information would be available once details of the plan have been finalised.
When MAS and AirAsia Bhd entered into a collaboration agreement on Aug 9 after major shareholders of both airlines executed a share swap deal, it was announced that MAS would review Firefly's operations and that the national carrier's shorthaul full-service carrier business may be undertaken by itself and/or through a new MAS subsidiary known as Sapphire. MAS was also said to have the flexibility to re-designate capacity, assets and resources from Firefly to form Sapphire.
However, since the initial announcement, details have been scant on what will happen to Firefly's existing operations. There have been concerns that Firefly flights will be cancelled with some routes axed and air fares increased as a result of the collaboration agreement.

Overlapping services: There have been concerns that Firefly flights will be cancelled with some routes axed and air fares increased as a result of the collaboration agreement signed in August.

 

A week after the August announcement, Firefly managing director Datuk Eddy Leong is reported to have said that Firefly would be upgraded to a full-service turboprop operator while Sapphire would take over its Boeing jets.
Leong added that Firefly's turboprop operations would be expanded in terms of fleet size and routes, and would continue as an independent brand under MAS ownership.
Meanwhile, CIMB Research expects Sapphire to start operations in November and the airline will be positioned as a full-service carrier serving regional routes (Asean, South China and south/east coast of India), in the same way SilkAir is positioned within the Singapore Airlines group.
“We believe that Sapphire will adopt the same seat configuration as the refreshed MAS B737-800 product, which is a significant improvement from the existing aged B737-400 fleet.

“Aside from this, all of Firefly's leased B737-800s could be re-configured from low-cost carrier planes into full-service carrier aircraft and then transferred to Sapphire,” the research report said.
It added that from a tax perspective, it would seem logical to keep all operations under mainline MAS because of its tax-exempt status until 2015 as well as its huge unutilised capital allowances and tax losses carried forward. But there are other considerations such as the need to clearly separate Sapphire from MAS as Qantas Airways did with Jetstar.
“Sapphire is likely to sign contracts of service with pilots and crew on different terms than that of MAS. Also, Sapphire staff are not likely to be unionised. This will give Sapphire a lower unit-cost base and help it achieve greater profits. Second, we suspect that a stake in Sapphire could eventually be sold to Qantas,” CIMB Research said.
Despite the fact that Qantas has said that its Asia-based super premium full-service carrier will be based in either Singapore or Malaysia (with a higher leaning towards Singapore), CIMB Research believes that Qantas will want to have a presence in Kuala Lumpur and may do so through an investment in Sapphire.
“As such, Sapphire needs to be separated from mainline MAS to facilitate an investment by Qantas, which would not be interested to invest in other parts of MAS's business, including its domestic and international aviation businesses, even if the Malaysian Government permitted this.
“An investment in Sapphire would fit Qantas very well because the KL aviation market is unlikely to be able to accommodate a super-premium offering by Qantas' new airline,” it added.

Source: The Star

US Bank halt the loan but Malaysia Bank give loan !!!

Based from Time Magazine 26 September 2011, Subcriber Edition, mention that US bank halt their loan to American even do the bank has profit more than USD 198 bilion. However at Malaysia the situan is different the Bank is racing in giving financing to Malaysian People. So does this a good clue in investing in KLSE stock market?
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UALA LUMPUR, Sept 20 (Bernama) -- OCBC Bank (Malaysia) Bhd aims to disburse RM4 billion in loans for Small and Medium Enterprises (SMEs) by year-end. Last year the bank disbursed about RM2.5 billion.

Director and Chief Executive Officer Jeffrey Chew said this year, the bank as of June, had approved RM5 billion in loans for SMEs with RM2 billion having been disbursed.

"We are very proud that Malaysia is number one in terms of access to credit for SMEs and this is spearheaded by Bank Negara Malaysia, which has enabled the industry to develop.

"They (SMEs) just need to have a good business plan, track record and human capital capability in areas such as branding, marketing, distribution and so forth," he told reporters at the ACCA SME Conference 2011 here.

SME Corp Malaysia's Deputy Chief Executive Officer Mahdi Mohd Ariffin said the main challenge faced by SMEs today was actually cash flow.

"When a bank looks at proposals, it needs to consider and access the cash flow of these SMEs because it helps them repay loans.

"Access to finance should not be the issue confronting SMEs, as Malaysia has been recognised as being number one, in terms of getting access to credit and there is ample liquidity in the market," he added.

He also said that banks are currently searching for good SMEs that have the potential to export or widen trade overseas.

Source: Bernama

The Ringgit Currency is down for a time..
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Tuesday September 20, 2011

Ringgit down on Europe debt crisis impact fears

By CHOONG EN HAN

PETALING JAYA: The ringgit slumped to its lowest range against the US dollar this year, as a combination of external headwinds in the eurozone and the United States continue to weigh in on Asian currencies across the board.
The ringgit weakened 1.09% to 3.1157 against the US dollar from 3.0820 last Friday as investors fled emerging markets on fears that the contagion risk of Europe's sovereign debt crisis might slow global economic growth and hurt the economies of export-based developing countries. The local unit had lost 1.98% of its value from a week ago.
Regional currencies were broadly lower with the rupiah leading the pack, with a 1.02% decline. Similarly, it was 2.58% higher a week ago.

Hong Kong-based Societe Generale fixed-income strategist Chong Wee-Khoon said Asian currencies continued their weakening move against the US dollar yesterday on concerns over global uncertainty and capital flights out of Asia.
“The weakening move started last week when the contagion fears finally spread to the Asia foreign exchange and local bonds market. Previously, the equity outflows seen in Asian had been recycled back into Asia bonds and foreign exchange. Such move (weak Asia foreign exchange) might continue as long as global uncertainty persist,” he said.
All eyes would be on the next Federal Open Market Committee (FOMC) meeting later this week, he said, adding that the near-term outlook was bearish for Asian currencies.
The two-day extraordinary FOMC meeting would be the most important event of the week as the Fed decides on the direction of the US monetary policy amid a staggering global economy that is slowly moving into stagnation.
“The ringgit has moved from 2.96 in early September, broken 200-day moving average at 3.03 and spiked to 3.11 in the last two weeks. The risk is for the ringgit to test previous highs of 3.16. Longer term, we like the ringgit on domestic fundamentals, but it is hard to fight the near-term upside move driven by lack of market confidence rather than a deterioration of Asian economies,” Chong said.
However, he said, the contagion had started a while ago in the equity markets but the local bond market had been relatively immune as investors sought yield enhancement and also the benefit of currency appreciation.
“With uncertainty accelerated in recent weeks, the markets have taken profit for fear to be the last one out,” he said.
According to Chong, the five-year MGS yield on Friday had gone from 3.19% to 3.48% in one week, and the spread between the five-year MGS and US Treasuries was now at 260 basis points (MGS 260bp higher) and it was the highest since March 2009 (317bp recorded).
He said there had been a sell-down in the Indonesia and Thai bond markets as well.
CIMB currency strategist Suresh Kumar Ramanathan said the external factors had stepped up the global risk aversion and the moves of central banks closely mirrored what had happened back in 2008.
“In the past two weeks, the markets still believed that there was still growth in the emerging markets. However, things have not been improving and external headwinds are eroding confidence,” he said.
He said the concern was still on mature developed money markets where their central banks were closer to easing monetary policy to boost liquidity, and the next action of easing rates.
Meanwhile, Tan Chee Wee, head of fixed-income research at Maybank Investment Bank Bhd, said there had been three days of sell-off in the bond market last week.
“I would say it is more of profit taking rather than economic worries as there have been three months of rally and the yield is already looking flat,” he said, adding that the sell-off was more towards domestic players relinquishing their positions, and while there were foreign players selling, there were also foreign players buying.

Source: The Star

Five Tips in Bear Market: Five world markets themes in the week ahead

Following are five big themes likely to dominate thinking of investors and traders in the coming week, starting Monday, Sept 19 and the Reuters stories related to them.

1/ FOR A FEW DOLLARS MORE
Global investors will in the coming week have the Fed's two-day meeting to distract them from the euro zone. There is a growing assumption that the U.S. central bank will deliver another version of "Operation Twist" - a program intended to drive down long-term interest rates. Coming on the heels of the Fed's pledge to keep rates low at least until mid-2013, this may offer some support for global stocks, which have barely lifted off lows hit in July on fears of recession and debt problems on both sides of the Atlantic. Equity valuations may be cheap but stocks could cheapen further still given there is no sign of an end to the euro zone debt crisis and a Reuters global poll shows an increase in the perceived risk of recession in developed countries. If the Fed does opt to twist again, G7 government bond curves will flatten.

2/ FISTFULS OF DOLLARS
Euro zone banks were already finding it costly to obtain dollar funds in the money markets. Given lenders typically hoard cash in the run-up to the end of the quarter and of the year to spruce up their books, it can only help that the ECB has reintroduced three-month dollar liquidity operations in coordination with other major central banks. The coming weeks will show whether this is enough to sustainably ease the money market stress that was being flagged by cross currency basis swaps and other prices. Nomura says that while FRA/OIS spreads are showing funding problems are far more focused in the European banking system than was the case in 2008, a steeper dollar FRA/OIS curve suggests there is an increased risk of future stress in the U.S. financial system. It is therefore little wonder that concern about Europe's sovereign debt crisis is evident at the highest levels in the United States.
3/ FEELING LUCKY?
The unprecedented move by a U.S. Treasury Secretary to attend this week's informal meeting of EU finance ministers in Poland raised market expectations, particularly given there appears to be openness in some EU capitals to the idea of a U.S. TALF-like leveraging of Europe's bailout funds. Rhetoric alone won't be enough to appease investors' nervousness, particularly given credit and secondary bond market prices are implying the near certainty of a Greek default that goes well beyond the scope of the private sector involvement plan already under way. Investor sentiment will also take a knock if the European Commission's plan to lay out options for euro bonds continues to encounter such strong opposition that it becomes a non-starter. And last but not least, the slow progress in ratifying the EFSF country by country is being closely monitored - delays or rejections would imperil the plan to transfer bond buying powers from the ECB and to allow it to support banks.

4/ IN THE LINE OF FIRE
European banks already face challenges in raising capital to deal with any further write-offs that they might suffer on their peripheral exposure. Any "disorderly" default by Greece would suck other euro zone sovereigns (notably Italy and even France) into the debt crisis, wreak havoc on the European financial system, and make it well nigh impossible for banks to raise funds in the market. Shares in European banks are still 56 percent lower than they were before the collapse of Lehman Brothers three years ago. Few are willing to view valuations as supportive, even though the 12-month forward P/E ratio for the STOXX Europe 600 banking index is at its lowest ever, 5.73. That's because analysts are continuing to cut their earnings estimates for financial institutions, with some even going into negative territory, making forward P/E less useful as a compass for investors.

5/ ANY WHICH WAY BUT UP?
Financial market interest in the coming week's BRICS meeting is running high given speculation over what these emerging market powers might be willing to do - as a group or individually - to help out the euro zone by buying southern European sovereign bonds. Barring any sign of such interest, the euro could find itself extending losses. The single currency faces drags from the broad trend of a narrowing U.S./German two-year spread, a shift in market expectations of ECB policy, as well as the various sovereign and financial sector problems that make up the euro zone crisis. A protracted euro slide, especially against the yen, raises the risk of intervention by Tokyo, especially as the Japanese half-year draws closer. Sterling will be the other currency in the spotlight in the coming week as BOE minutes will show how many MPC members have swung in favor of another round of quantitative easing.

Source: The Edge

Super Tax by Obama: "Buffett tax" on millionaires

A tax scheme for rich !!
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WASHINGTON: President Barack Obama, in a populist step designed to appeal to voters, will propose a "Buffett Tax" on people making more than $1 million a year as part of his deficit recommendations to Congress on Monday.
Such a proposal, among suggestions to a congressional supercommittee expected to seek up to $3 trillion in deficit savings over 10 years, would appeal to his Democratic base ahead of the 2012 election but likely not raise much in revenues.
White House Communications Director Dan Pfeiffer said in a tweet on Saturday the tax would act as "a kind of AMT" (Alternative Minimum Tax) aimed at ensuring millionaires pay at least as much tax as middle-class families.
The "Buffett Tax" refers to billionaire U.S. investor Warren Buffett, who wrote earlier this year that rich people like him often pay less in tax than those who work for them due to loopholes in the tax code, and can afford to pay more.
Obama will lay out his recommendations in White House Rose Garden remarks at 10.30 a.m. (1430 GMT) on Monday and is expected to urge steps to raise tax revenue as well as cuts in spending.
But Congress is at liberty to ignore his suggestions and Republicans, who control the U.S. House of Representatives, have said that they will not agree to tax hikes.
The supercommittee of six Democratic and six Republican lawmakers must find at least $1.2 trillion in deficit savings before the end of the year to avoid painful automatic cuts, and is mandated to seek savings of up to $1.5 trillion.
Those savings are on top of $917 billion in deficit reduction agreed to in an August deal to raise the U.S. debt limit and Obama wants it to go further.
He has separately urged the supercommittee to consider $467 billion in tax increases on top of that goal to pay for a jobs bill he unveiled earlier this month.
The Buffett Tax could help energize Obama's base by highlighting a feature of the U.S. tax code that allows the super rich to pay lower rates of tax than less wealthy Americans because the bulk of their income is capital gains, dividends and the 'carried interest' earnings of hedge fund managers.
That is taxed at 15 percent, compared with rates of 10 to 35 percent on straightforward income.

Source: Reuters

US STOCKS-Push for action in euro zone fuels gains

NEW YORK: U.S. stocks rose 1 percent in a third day of gains on Wednesday after European leaders displayed new urgency in efforts to contain the euro zone debt crisis.
German and French leaders called on Greece to implement all financial reforms "strictly and effectively," a German government spokesman said.
Greece expects policymakers to report that Athens is on track to fulfill its targets and receive the aid it needs to avoid any chance of a debt default, a Greek official said.
Adding to the relief for investors, Italian Prime Minister Silvio Berlusconi won a confidence vote on an austerity plan for Italy, the euro zone's third-largest economy.
Fears that Europe's crisis could plunge it into recession and drag down global growth have hammered stocks for weeks. Stocks that are typically well positioned to benefit from economic growth, such as General Electric and other industrial shares, were top gainers.
"What we're watching is global hedge funds, at least momentarily, throw the risk-trade switch back on, directing funds away from the dollar and into the euro and into global equities," said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon.
Sentiment received an early boost after Europe's top bureaucrat said plans for a common euro zone bond, seen by many as a key tool to ease the region's festering debt crisis, would soon be presented.
The Dow Jones industrial average was up 140.88 points, or 1.27 percent, at 11,246.73. The Standard & Poor's 500 Index was up 15.81 points, or 1.35 percent, at 1,188.68. The Nasdaq Composite Index was up 40.40 points, or 1.60 percent, at 2,572.55.
The S&P 500 is still down 11.6 percent since July 22, roughly when the market's recent slide began.
The actions by European leaders followed an urgent call by U.S. Treasury Secretary Timothy Geithner for them to act forcefully to solve Europe's debt crisis. Geithner said they have the financial and economic capacity to do so.
Geithner will attend an informal meeting of EU finance ministers in Poland on Friday.
Conglomerate GE ended 2.5 percent higher at $15.79. Tech stocks also were among top gainers, and the Nasdaq outperformed the other two major indexes for a third day.
Shares of Nvidia Corp jumped 5.2 percent to $15.28, while SanDisk Corp, another chip maker, rose 4.2 percent to $42.66.
Dell Inc added 3.3 percent to $14.86 a day after its board authorized an additional $5 billion stock buyback program.
Volume was 8.5 billion shares on the NYSE, Amex and Nasdaq, above last year's average of roughly 7.6 billion.
Advancers beat decliners by nearly 11 to 4 on the NYSE and by about 9 to 3 on the Nasdaq.
The day's U.S. economic data was mostly brushed aside by investors. Growth in retail sales stalled in August while business inventories rose slightly less than expected in July, suggesting caution by firms about demand at the start of the third quarter.

Source: Reuters

Lynas Fulfils All Requirements, Says Western Australian Minister for Mines and Petroleum

So its ok with Australia then when will the Lynas will be  stock listed in malaysia?/
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PERTH, Sept 12 (Bernama) -- Western Australian Minister for Mines and Petroleum Norman Moore says there is no concern by the Australian government in respect to any operations of Lynas Corporation Ltd as the company has fulfilled all the requirements.

The Minister also voiced his pleasure in the company's involvement in developing its Mount Weld rare earth project as it has given Western Australia a chance to be a part of the world's rare earth business.

Moore, who is responsible for initiating the single biggest overhaul of Western Australia's mining industry's occupational health and safety system, also assured Malaysians that the level of radioactivity attached to the product from Mount Weld was very low, that it was not considered as Dangerous goods from the point of transportation regulations.

"So it can be transported from Mount Weld to Fremantle Port and exported (to Malaysia) from there and does not require the regulatory arrangement that would relate to dangerous goods with such a low level of radioactivity attached to it. So, it meets all the requirements," he told reporters at his office.

Lynas is building a RM700 million rare earth processing plant in Gebeng, Pahang, using raw materials sourced from its Mount Weld mine, to produce rare earth products essential for making hi-tech gadgets.

From the mine, the raw materials are taken to its concentration plant within the site and processed into concentrates before they are shipped from Port of Fremantle to Malaysia to be processed into rare earth products at its Gebeng plant.

Moore said the project was important because rare earth was in demand due to the range of products using this material.

"As you are aware, there is severe competition in the world. The Chinese government has almost a monopoly with respect to rare earth, so we are aware that other countries would like to have access to rare earth and as such, we are very keen for this project to go ahead," he added.

Meanwhile, China, which produces 95 per cent of the world's rare earth, has been cutting its export quota, causing a global shortage of rare earth.

With the rush to find alternative source, Lynas jumped onto the bandwagon, with its rich deposits of rare earth at its mine in Mount Weld, and had set up a Plant in Malaysia to be nearer to the markets.

As for opposition by some Green Party members in Australia to Lynas' Malaysian project, he said, products using rare earth were also green-related.

"Ironically, the products that used rare earth are in fact related to the things like wind turbines that the Greens might be supportive of developing because they are looking for renewable energy sources," he said.

Moore said he did not understand why they should oppose to a plant being developed in Malaysia which would provide employment and opportunities for the Malaysian people, adding that it was unfortunate for them to be also involved in Malaysian politics and the exaggerated circumstances surrounding the Gebeng plant.

"I must confess I don't understand the politics of Malaysia at the moment. I understand you are in an election mood and I can understand Green Group seeking to take advantage of the opportunities to promote the green agenda but I think it is unfortunate that the Australian Green should involve themselves in Malaysian politics, particularly these days, to be exaggerating the circumstances surrounding the project," he added.

Moore said the mining and transportation of the rare earth products from Mount Weld would be done under strict regulations in Western Australia and processing in Malaysia would be done under Malaysian laws which were rigorous as that of Australia's.

Source: Bernama

Europe debt crisis fears hammer euro, stocks and euro fiat money !!

The debt mean the destruction of Euro Fiat..
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NEW YORK: Growing doubts about Europe's ability to resolve its debt crisis punished the euro and world stock markets on Friday, Sept 9, while G7 finance ministers met to discuss measures to revive economic growth.
The euro hit 6-1/2 month lows against the U.S. dollar on nervousness over the outcome of a Greek debt swap deal and on jitters fueled by the planned resignation of Juergen Stark, the top German on the European Central Bank's board, in protest
over its controversial bond-buying program.
Bond buying has been one of the ECB's main weapons in fighting the debt crisis. The Stark news kindled uncertainty over internal ECB support for it and pummeled the euro, a day after a sell-off on the ECB backing away from further interest rate rises.
The nervousness fueled safe-haven buying of German and U.S. government debt. The 10-year Bund yield hit another record low, while 10-year U.S. Treasuries yields touched a 60-year trough.
"Europe is the No. 1 thing causing pressure on the market as the realization grows that what we've done so far hasn't worked," said Liz Ann Sonders, the New York-based chief investment strategist at Charles Schwab Corp, which has $1.65
trillion in client assets.
Stark's departure highlighted divisions within the ECB on the handling of Europe's debt woes. The ECB later confirmed Stark will step down at the end of the year.
"When you get a new story like this, that there's internal turmoil on the ECB, that immediately has implications for the bond-buying program, which immediately has implications on the capital level in European banks," said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.
Traders, surprised by the Stark news, were keeping tabs on developments with Greece's debt swap. The deal is critical for Athens to secure a second 109 billion euro bailout and avert a near-term default that could ripple across Europe and the global banking system.
Banks and insurers face a Friday deadline to indicate whether they will join an exchange of Greek debt, part of an international bailout package agreed in July. It is expected 70 percent of the private investors would agree to such a move, below the 90 percent threshold that Greece has said it wants to go through with the deal.
The cost to insure Greek sovereign debt for five years surged to a record high of 3,106 basis points, up nearly 300 basis points on the day, according to data vendor Markit.
Finance ministers and central bankers from the Group of Seven industrialized nations were meeting in Marseille, where host France has called for a coordinated response from G7 members to deal with Europe's debt crisis and the region's shaky banks.
In the United States, President Barack Obama unveiled his $447 billion plan to revive economic growth late on Thursday, but investors worried that Congress would not pass the measure and the Federal Reserve may not follow quickly enough with its own action.
Fed Chairman Ben Bernanke, in a speech on Thursday, left the door open for more monetary stimulus but withheld details on the timing and what type of measures the Fed would enact.
The Dow Jones industrial average finished down 303.68 points, or 2.69 percent, at 10,992.13. The Standard & Poor's 500 Index ended 31.67 points lower, or 2.67 percent, at 1,154.23. The Nasdaq Composite Index closed down 61.15 points, or 2.42 percent, at 2,467.99.
For the week, the Dow fell 2.2 percent; the S&P 500 lost 1.7 percent and the Nasdaq slipped 0.5 percent.
The FTSEurofirst 300 index of top European shares lost 2.6 percent on the day and the MSCI world equity index was off 3.2 percent. Both indexes were down 3.7 percent on the week, their third-largest drop in the past 12 months.
Earlier, Tokyo's benchmark Nikkei ended down 0.6 percent, bringing its weekly loss to 2.4 percent.
Another retreat in equities boosted safe-haven German and U.S. government bond prices. The 10-year Bund yield touched an all-time low of 1.74 percent, while the benchmark 10-year U.S. Treasury was last down 1.6 percent against the dollar at $1.3668 after touching its lowest in 6-1/2 months at $1.3627.
The single currency has fallen 5 percent in September.
Gold slipped after soaring to a record high above $1,900 an ounce earlier this week due to its appeal as both a safe haven and a hedge against inflation. It ended down 0.6 percent at $1,860 an ounce as nervous investors sold the metal on growing concerns its run-up had been overdone.

Source: Reuters

Japan cool down the Yen with zero interest rate !!

Japan central bank keeps key interest rate at zero

TOKYO: Japan's central bank kept its key interest rate unchanged at virtually zero Wednesday to help the world's No. 3 economy weather a strong yen and worries about a global slowdown.
The Bank of Japan's nine-member policy board voted unanimously at a two-day meeting to maintain the overnight call rate target at zero to 0.1 percent.
It described the economy as "picking up steadily" and said the supply problems triggered by the March 11 earthquake and tsunami were mostly resolved. The central bank expects the economy to return to moderate recovery from the second half of this fiscal year, which ends March 2012.
At the same time, it warned of U.S. economic uncertainty and European debt problems. It also questioned whether emerging, high-growth economies could maintain momentum while taming high inflation at the same time.
"It is necessary to carefully monitor how Japan's economy will be affected by the uncertainty regarding the developments overseas and the ensuing fluctuations in the foreign exchange and financial markets," the Bank of Japan said in its statement.
The central bank held off from introducing new measures to ease monetary policy despite calls from government and industry to do more. Last month, it expanded two existing funding tools by 25 percent to 50 trillion yen ($646 billion) as part of efforts to weaken the yen.
It vowed to keep interest rates at zero until prices stabilize and said it would continue pursuing "powerful monetary easing."

Source: AP

 

Double Dip recession worries South Sea Asia Tiger !! : Singapore PM Warns Risk Of Second Global Recession

Double Dip recession worries South Sea Asia Tiger !! The story sure give shock impact in market.
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INGAPORE, Sept 2 (Bernama) -- Singapore Prime Minister Lee Hsien Loong says the global economy is deeply troubled and in the short-term, there is a risk of relapsing into a second global recession.

He said the economic problems in the United States and in the European Union would take years to resolve, even assuming they muster the political will and consensus needed.

"Singapore is vulnerable to these external problems, so we should be prepared for turbulence ahead. Fortunately, Singapore is in a good position. We have a vibrant economy, a capable and hard-working people and substantial reserves built up prudently over many decades.

"These give us the resilience and the resources to see us through the worst storms," he said in his speech at the swearing-in ceremony of the republic's seventh President Dr Tony Tan Keng Yam at the Istana last night.

On Dr Tan's responsibility, Lee said: "You are taking office at a critical point in Singapore's economic and socio-political development."

"Indeed, protecting our Past Reserves was a major reason for creating the institution of the Elected Presidency.

"Our Past Reserves are our rainy day funds, which are not just for today's Singaporeans, but also for our future generations, our children today and their children tomorrow," he said.

Lee said the president holds the second key and must agree before the government can draw upon Past Reserves.

He said drawing on "our reserves should only be an absolutely last resort. Our first strategy is to ensure a resilient and dynamic economy."

"But our reserves give us confidence that we can weather any crisis, however severe it may be. My Government will continue to be prudent and build up our reserves year-by-year," Lee said.

He said there will surely be future occasions when the government will have to seek the president's approval to draw on our hard-earned Past Reserves again.

"It could conceivably happen within your term as president, if the dangers facing the world economy escalate and precipitate a major crisis.

"In such an eventuality the government will work with you, Mr President, to handle the request and decision deliberately, systematically, and in the best interests of Singaporeans," Lee added.

Source: Bernama