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Will the slowdown in property prices continue? | MPN.net – Malaysia …

Posted on| December 31, 2011By THE STARYes.IN all likelihood, there will just be slower growth across the board for the mere fact that the last three years have seen exceptional growth since 2008, when the global crisis hit. The following year saw a recovery and 2010 was a year of exceptional growth. Property professionals had never seen such price increases in their 30 years in the profession, where prices went up by double digits in a short period of time. (more…)

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Notion Vtec 2Q net profit up 43.49% to RM15.54 million

by Surin Murugiah of theedgemalaysia.com on Thursday, 17 May 2012 10:58

KUALA LUMPUR (May 17): Notion Vtec Bhd net profit for the second quarter ended March 31, 2012 rose 43.49% to RM15.54 million from RM10.83 million a year earlier, on teh back of higher revenue.

The company said on Thursday that its revenue for the quarter rose 56% to RM84.5 million from RM53.93 million in 2011, due to orders from three new HDD customers and an existing major camera customer to catch up with production back log resulting from the flood in Thailand.

Earnings per share was 10.06 sen compated to 7.01 sen previously, whiel net assets per share was RM1.80.

For the six months ended March 31, Notion’s net profit fell 55.8% to RM10.71 million from RM24.23 million on the back of revenue RM124.14 million compared to RM113.91 million.

Reviewing its performance, Notion said the March Quarter performance was more than a turnaround situation and is attributed to the strong orders from new customers and also recovery orders from the affected customers.

Notion said it was currently experiencing shortage of labour, computer numerically- controlled (CNC) machines and space to meet renewed purchase orders.

It said the strong orders may be attributed to unfulfilled orders of components arising from the Thai flood impact but also from the new customers.

“This trend will continue into the remaining FY2012 quarters and beyond,” it said.

“Based on the prevailing scenario, the Board is fairly confident that our business model is well on the road of recovery and onto another phase of high growth and hopefully with corresponding better financial performance. It is expected that an interim dividend will only be announced in conjunction with the release of the June Quarter results,” it said.

IGB Corp 1Q net profit up 47.96% to RM57.44m

by Surin Murugiah of theedgemalaysia.com on Thursday, 17 May 2012 10:01

KUALA LUMPUR (May 17): IGB Corporation Bhd net profit for the first quarter ended March 31, 2012 jumped 47.96% to RM57.44 million from RM38.82 million a year earlier, due to improved performance by all its divisions.

The company said on Thursday that its revenue for the quarter increased 23.7% to RM222.89 million from RM180.07 million in 2011, due to due to higher contributions from all operating divisions.

Earnings per share was 3.93 sen compared to 2.67 sen previously, while net assets per share was RM2.33.

On its prospects, IGB Corp said operating results for the first three months of 2012 had been encouraging with increased turnover contributions from all divisions when compared to the first three months of 2011;

The company said its property development and construction divisions’ turnover both increased by more than 100%, whilst property investment and hotel divisions’ turnover had increased by 6% and 13% respectively.

“With these improved performances, the Board is confident that the Group’s operational results for the current financial year will be better than the previous financial year barring any significant adverse changes in the global and domestic economic conditions,” it said.

Fajarbaru unit gets RM13.65m KLIA2 docking guidance system job from MAHB

by Surin Murugiah of theedgemalaysia.com on Thursday, 17 May 2012 09:19

KUALA LUMPUR (May 17): Fajarbaru Builder Group Bhd’s unit has secured contract worth RM13.65 million from Malaysia Airports Holdings Berhad for a visual docking guidance system (VGDS) at KLIA2, KL International Airport in Sepang.

The company said on Thursday that its unit Fajarbaru Builder Sdn Bhd had received a letter of acceptance from MAHB to supply and commission the VGDS.

It said the contract was for a period of 11 months commencing May 30, 2012.

Fajarbaru said the Contract was expected to contribute positively to its earnings for the financial year ending June 30, 2013.

EPF Joins JCorp in KFC & QSR Acquisition

by Surin Murugiah of theedgemalaysia.com on Thursday, 17 May 2012 06:41

KUALA LUMPUR (May 17); The Employees Provident Fund (EPF) has joined Johor Corporation (JCorp) to become shareholders of Massive Equity Sdn Bhd (MESB), the special purpose vehicle formed to undertake the acquisition of QSR Brands Bhd (QSR) and KFC Holdings (M) Bhd (KFC).

MESB had in December last year announced its plan to to acquire the entire business and undertakings of KFC at a price equivalent to RM4 per share and RM1 per warrant.

MESB also made a conditional offer to buy the business and undertakings of QSR at a price equivalent to RM6.80 per share and RM3.79 per warrant.

In a joint statement on Thursday, EPF and JCorp said that with the signing of the shareholders’ agreement, JCorp would maintain its 51% stake in MESB, while the EPF-led consortium makes up the remaining 49% via Melati Asia Holdings Limited (MAHL).

?MAHL is 51% owned by EPF, while CVC Capital Partners (CVC) holds the rest. Consequently, 76% of MESB is in Malaysian hands,” they said.

JCorp president and chief executive officer Kamaruzzaman Abu Kassim said it was heartened by EPF’s confidence in JCorp.

“Indeed, EPF’s sterling track record as Malaysia’s premier retirement savings fund and an institutional investor puts us on a firmer footing to ensure greater corporate governance and continued growth for one of our prime investments,” he said.

EPF Deputy Chief Executive Officer for Investment Datuk Shahril Ridza Ridzuan said that the EPF was confident that the investment in a highly cash generative business would meet its long term goals of providing sustainable financial growth coupled with accretive yields.

“The KFC and Pizza Hut brands have been a market leader in Malaysia for decades and we look forward to enhancing the brands and their market share even further in future,” he said.

AMMB 4Q net profit up 8.3% to RM342.63m

by Surin Murugiah of theedgemalaysia.com on Thursday, 17 May 2012 06:07

KUALA LUMPUR (May 17): AMMB Holdings Bhd net profit for the fourth quarter ended March 31, 2012 rose 8.3% to RM342.63 million from RM316.35 million a year earlier, due mainly to strong non-interest income growth, lower provisions and well diversified divisional contributions.

AMMB said on Thursday that its revenue for the quarter rose 7.9% to RM1.95 billion from RM1.81 billion in 2011.

Earnings per share was 11.47 sen compared to 10.54 sen previously, while net assets per share was RM3.70.

AMMB declared a final dividend of 13.5 sen.

AMMB managing director Ashok Ramamurthy in a statement on Thursday said FY2012?s improved results demonstrated the group’s disciplined execution of the year’s priorities.

“In delivering profitable growth and rebalancing, we achieved our fifth consecutive year of record performance. Loans and deposits growth remained sound while credit quality continued to improve with lower allowances,” he said.

On the banking group’s outlook, Ramamurthy said that in 2012, Malaysia’s economic growth was expected to remain resilient, driven by domestic demand and private investment expansion.

Incentives and plans announced under the 2012 Budget were likely to encourage private consumption, he said.

He said AMMB expected gross domestic product to experience growth of 4%-5% in 2012, but several risks such as the Euro debt crisis and lower exports remained.

“In the Malaysian banking industry, the rollout and implementation of projects under the Economic Transformation Programme will continue to support lending and capital market activities.

“However, new responsible lending guidelines will moderate consumer loans demand. We anticipate banks to adapt to the changes, but margins will still be impacted by ongoing competition for loans and deposits,” he said.

Scomi to exit machine shop biz with disposal of Nigerian unit & Oiltools Africa for US$39.77m

by Surin Murugiah of theedgemalaysia.com on Thursday, 17 May 2012 05:48

KUALA LUMPUR (May 17): Scomi Group Bhd is exiting from the machine shop business after disposing its entire interest in Scomi Nigeria Pte Ltd and 2% equity interest in Oiltools Africa Limited (OAL) for US$39.77 million cash (RM123.90 million).

In a statement Thursday, Scomi chief executive Shah Hakim Zain said that with the strategic sale, the company had intensified its focus on higher margin, high value added activities in high growth markets where Company held leading market positions.

“By actively managing our portfolio we are able to concentrate our people, capabilities and investment on sustaining Scomi’s oil and gas business in for the long term,” he said.

He said the disposal was part of the Company’s divestment plan to strengthen its resources for future investments by unlocking the value of the business.

In 2010 the company sold its subsidiary Scomi Engineering Bhd’s machine shop business in Asia Pacific and the Middle East to Sumitomo Corporate Asia Pte Ltd for US$101.45 million cash.

“This was the first step in a larger divestment strategy to exit the machine shop businesses owned by Scomi around the world. Scomi continued the divestment plan in the following year with the disposal of its machine shop business in Aberdeen, UK for GBP1.0 million,” said Shah Hakim.

He said the sale of the Nigerian machine shop business was the final step in the Company’s exit strategy from the machine shop business.

The Nigerian machine shop business was first acquired by Scomi back in 2005, and since then the Company has grown the

Shah Hakim said the total gain from the sale of all the machine shops is in excess of USD120 million.

The proceeds from the disposal will be used to strengthen the company’s financial structure and the exercise was expected to be completed by the third quarter of 2012, he said.

JCY International 2Q net profit surges 12 fold to RM163.09m

by Surin Murugiah of theedgemalaysia.com on Thursday, 17 May 2012 09:42

KUALA LUMPUR (May 17): JCY International Bhd net profit for the second quarter ended March 31, 2012 surged 12 fold to RM163.09 million from RM12.46 million a year earlier, on the back of 45% increase in revenue.

The company said on Wednesday that its revenue for the period jumped to RM576.58 million from 397.43 million in 2011.

Earnings per share rose to 7.98 sen from 0.61 sen.

JCY declared a single tier tax exempt second interim dividend of 3 sen per ordinary share or 12% for the financial year ending Sept 30, 2012.

For the six months ended March 31, JCY’s net profit jumped to RM325.54 million from RM19.97 million, on the back of revenue RM1.14 billion compared to RM836.34 million a year earlier.

Reviewing its performance, JCY said the improvement in revenue and earnings was due mainly to better Average Selling Prices (“ASP”) as a result of shortages in HDD mechanical components after the October 2011 Thailand floods, favourable exchange rates and higher volumes shipped during the periods.

“For Malaysia and Thailand segments, the increased revenue and improved profit achieved in the reporting quarter and year-to-date period comparing to previous year corresponding periods were due mainly to the same factors above,” it said.

On its prospects, JCY said the HDD Industry Supply Chain was recovering from the structural damage arising from the Thailand floods in October 2011.

However, such recovery still subject to long lead time on a lot of capital equipment and high capital expenditure needed to rebuild all the assets that were destroyed by the floods, it said.

“Barring any unforeseen circumstances and factors beyond our control within the production planning and HDD supply chain, we are optimistic the increases in ASP arising from Thailand floods, our productivity improvements, and the opportunity to capture additional global market share will enable JCY to achieve favourable results for the coming quarters,” it said

Kian Joo Q1 pre-tax profit falls to RM33.6m

Kian Joo Can Factory Bhd’s (KJCF) pre-tax profit for the first quarter ended March 31, 2012 (1Q12) fell to RM33.584 million from RM38.556 million in the same quarter of last year.

Revenue, however, increased to RM266.771 million from RM255.306 million, the company said in a filing to Bursa Malaysia today.

KJCF’s cans division generated a total operating revenue of RM192.4 million in the 1Q12, an increase of seven per cent from the RM180.3 million recorded last year.

The increase in revenue from this division was mainly attributable to the rise in export sales, which accounted for 90 per cent of the total increase in sales in the 1Q12, when compared to the corresponding period of 2011.

Meanwhile, revenue from KJCF’s cartons division rose by seven per cent for the quarter under review to RM58.4 million, backed by revenue growth contribution from Vietnam’s operation.

KJCF’s contract packing services division’s revenue however, declined by 22 per cent from the RM20.6 million registered in 2011, due to a decrease in export sales compared to last year.

On prospects, the group said it would continue its efforts to develop its regional market in the 2012 financial year.

The board expects the group’s overall performance for the year 2012 to be satisfactory. — Bernama

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FKLI and FCPO Futures Corner – Bursa Malaysia: 20120518 1046 …

Bank Negara Malaysia’s (BNM) Governor Tan Sri Dr Zeti Akhtar Aziz said that interest rate policy should be based on the outlook for inflation and growth. “We need to assess this very carefully in deciding the future direction. There should not be an overreaction and over-adjustment because this would result in an over-adjustment in the economy,” she said. “Right now, we have a moderation in the rate of inflation. We have interest rates at a point where they are accommodative. At this point in time, I believe that unless inflation does begin to again rise, it does not merit consideration of raising rates.” The central bank does not see a need to revise 2012’s GDP growth at this point of time as that 4-5% is mainly driven by domestic demand. BNM already priced in the prospect of significantly lower export growth, she said. BNM’s 2012 inflation estimate of 2-3% is intact. The only risk to that range of inflation is commodity prices, she said. On risk concerns over rising property prices and household debt, Zeti said BNM has already put in place pre-emptive, wide-ranging measures to address this issue. Zeti also said that there is no need for the central bank to ask lenders to set aside more reserves against property lending at this point as banks are well-positioned to withstand any set-back in terms of growth or volatility. (Bloomberg)

Bank Negara Malaysia’s (BNM) Governor Tan Sri Dr Zeti Akhtar Aziz warned that Greece exiting the euro would have “unimaginable” consequences for Europe and that she expects a solution will be reached to prevent a departure. Measures to prevent a Greek departure from the common currency should also be accompanied by a plan to boost growth in the region, Zeti said. “Structural adjustments” being imposed in Greece and on other economies such as fiscal austerity need to be done gradually, she said. “The worst-case scenario is what we saw in Asia when one economy collapses, the market usually goes on to focus on the next one, and there will be contagion that will affect different countries probably that don’t deserve those kinds of consequences,” Zeti said. Growth prospects for Asian nations may falter as Greece’s failure to form a government could reverse progress made in resolving Europe’s debt turmoil, with a China slowdown and an uneven US recovery adding to risks. (BT)

Malaysia and Australia will sign a free trade agreement (MAFTA) in Malaysia next Tuesday. It will be Malaysia’s sixth bilateral FTA. MAFTA was successfully concluded on 30 Mar 2012. (Bernama)

Bank Negara Malaysia has signed a Memorandum of Understanding (MoU) with the Central Bank of the Republic of Turkey to foster strategic cooperation between both countries. The MoU is also aimed at promoting bilateral investments and liquidity arrangements, to support the development of the financial services sector in both countries, and enhance economic and financial linkages. It includes building the required financial infrastructure, payments and settlements arrangements to facilitate bilateral trade in the respective local currencies of the two countries. (Bernama)

Europe’s debt crisis, higher oil prices and the year-end budget cuts and tax increases still remain risks to the US economy, Treasury Secretary Timothy Geithner said, adding that raising the debt ceiling “does not have to be a crisis” as it was last year. He also reiterated that the US “can’t afford” to extend the Bush-era tax cuts for the upper-income when they expire later this year. (Reuters, WSJ)

The size of the US commercial paper market grew by US$27.2bn to US$993.6bn on a seasonally adjusted basis in the week ended 16 May from a seasonally adjusted US$966.4bn outstanding a week earlier, the third straight week of increase. (Reuters)

US jobless claims were unchanged in the 12 May week at 370,000, the third consecutive week of improvement. The four-week moving average eased to 375,000 from a revised 379,750 in the earlier week. (Bloomberg)

US leading indicators fell 0.1% mom in Apr (+0.3% in Mar), exactly the opposite of consensus expectations of a 0.1% gain. (Bloomberg)

US factory activity in the mid-Atlantic region unexpectedly contracted in May to its weakest in eight months as new orders and employment measures slowed.The Philadelphia Federal Reserve Bank said its business activity index dropped to minus 5.8 from positive 8.5 in Apr. The reading was the lowest since Sep 2011 and missed consensus forecasts for a positive reading of 10. (Bloomberg)

US foreclosure filings fell to a five year low in Apr totalling 188,780, down 14% yoy and 5% mom, according to RealtyTrac Inc. It was the lowest tally since Jul 2007. Meanwhile, the mortgage delinquency rate fell in the first quarter to 7.4%, the lowest level in more than three years, the Mortgage Bankers Association said (Bloomberg)

Japan’s economy grew 1.0% qoq in 1Q12 (a revised 0.0% in 4Q11) on account of rising domestic demand and a boost in exports, exceeding expectations for a 0.9% rise. On an annualised basis, the measure grew 4.1% (a revised 0.1% in 4Q11), also exceeding the median estimate of a 3.5% growth. (AFP)

Japanese banks’ new loans for housing grew 10.0% yoy in 1Q12 (2.9% in 4Q11), whilst new loans for the purchase of consumer goods and services grew 16.4% yoy in 1Q12 (19.3% in 4Q11). (Bloomberg)

Japanese capacity utilisation grew 1.3% mom in Mar (-1.7% in the earlier estimate), whilst industrial production grew 14.2% yoy (13.9% in the earlier estimate). Machine tool orders grew 0.4% yoy in Apr (0.5% in the earlier estimate). (Bloomberg)

Singapore’s non-oil domestic exports rose 8.3% yoy in Apr (-4.3% in Mar), faster than the 5.9% growth predicted by analysts on the back of stronger performances from petrochemicals and pharmaceuticals. Electronic exports grew 1.0% yoy (2.8% in Mar), a quarter of the 4.0% expected by economists. (Bloomberg)

Singapore GDP grew 10.0% qoq in 1Q12 (9.9% in 4Q11), close to expectations of a 10.6% rise. On a yoy basis, the measure grew 1.6%, matching 4Q11 but falling short of analysts’ forecast of a 1.8% rise. (Bloomberg)

Singapore stuck to its economic growth projections of 1-3% for 2012 but warned there was a chance of a “disorderly sovereign debt default” in the eurozone that could hit exports. (AFP)

South Korea is prepared to take “prompt” action to stabilize markets “with a comprehensive action plan” should it be needed as Europe’s sovereign debt crisis deepens, vice finance minister Shin Je Yoon said. (Bloomberg)

India’s economic growth story is intact and the current account deficit under control, senior Finance Ministry officials told a team from Fitch Ratings, weeks after Standard & Poor’s (S&P) cut its outlook for Asia’s third largest economy. (Reuters)

The Thai industries sentiment index went up to 104.0 in Apr (102.1 in Mar), the third straight month of increase, according to the Federation of Thai Industries. (Bangkok Post)

Thai car exports rose 6.21% yoy in Apr to 55,433 units but was down 38.28% mom with the export value for the month standing at THB26.52bn, an increase of 14.29% yoy. (Bangkok Post)

Thailand’s Board of Investment revealed that 407 investment projects, worth THB155bn altogether, have been carried out in Thailand by foreign investors during the first four months of 2012. (Thai Financial Post)

The Bangko Sentral ng Pilipinas reported that the net inflow of foreign portfolio investments reached US$333.43m in Apr, falling by 51% yoy from the US$673.8m reported in the same month last year as global risk aversion rose. (Business Inquirer)

The Philippines can still attain its 2012 growth target of 5-6% and improve its medium- to long-term growth potential to 7-8% per year, according to new National Economic and Development Authority head Arsenio M. Balisacan. (Business Inquirer)

US President Barack Obama extended US sanctions against Myanmar, warning that despite progress on human rights and governmental reform, a political opening in the country remained “nascent.” (Bangkok Post)

Greece’s credit rating was downgraded one level to CCC from B- by Fitch Ratings on concerns the country won’t be able to muster the political support needed to sustain its membership in the euro area. (Bloomberg)

Global Economic Outlook: Impact on the European Waste …

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Singapore Warns of Europe Default Risk as Economy Expands 10 …

Enlarge image

Singapore Warns of Europe Default Risk as Economy Expands 10%

Sam Kang Li/Bloomberg

Higher oil costs, rising housing rents, more expensive private transportation and unemployment near a three-year low have sustained price pressures in the city state.

Higher oil costs, rising housing rents, more expensive private transportation and unemployment near a three-year low have sustained price pressures in the city state. Photographer: Sam Kang Li/Bloomberg

Jerram on Singapore's Growth Outlook

May 17 (Bloomberg) — Richard Jerram, chief economist at Bank of Singapore Ltd., discusses the Singapore and Japanese economies, Bank of Japan monetary policy and the impact of the European sovereign-debt crisis on the region.
He speaks with Caroline Hyde on Bloomberg Television’s “First Look.” (Source: Bloomberg)

Singapore GDP Growth of 2%-3% in 2012 Seen by Ling

May 17 (Bloomberg) — Selena Ling, head of treasury research at Oversea-Chinese Banking Corp. in Singapore, talks about Singapore’s economic growth and the outlook for the nation’s currency.
Singapore’s gross domestic product rose an annualized 10 percent in the three months through March 31 from the previous quarter, more than an initial estimate of 9.9 percent growth, the Trade Ministry said today. Ling speaks with Susan Li on Bloomberg Television’s “First Up.” (Source: Bloomberg)

Greece Has `No Good Solutions,' Mauldin Says

May 16 (Bloomberg) — John Mauldin, president of Millennium Wave Advisors, talks about the possibility that Greece will leave the euro.
He speaks with Pimm Fox on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

Malaysia's Central Bank Governor on Europe Crisis

May 17 (Bloomberg) — Zeti Akhtar Aziz, Malaysia’s central bank governor, talks about Europe’s sovereign-debt crisis and Greece’s potential exit from the euro area.
She spoke yesterday in Istanbul with Bloomberg Television’s Haslinda Amin. (Source: Bloomberg)

Enlarge image

Singapore Warns of Europe Default Risk as Economy Expands

Sam Kang Li/Bloomberg

A man has his photo taken against the central business district skyline in Singapore.

A man has his photo taken against the central business district skyline in Singapore. Photographer: Sam Kang Li/Bloomberg

Singapore’s government said the risk
of a “disorderly” debt default in Europe can’t be ruled out,
clouding the outlook for its economy even as growth rebounded
last quarter.

Gross domestic product rose an annualized 10 percent in the
three months through March 31 from the previous quarter, more
than an initial estimate of 9.9 percent growth, the Trade
Ministry said today. The median of 14 estimates in a Bloomberg
News survey was for a 10.6 percent gain.

Greece’s inability to form a new government after an
inconclusive election could reverse progress made in resolving
Europe’s debt turmoil, compounding risks stemming from a China
growth slowdown and an uneven U.S. recovery. While Singapore
tightened policy in April through faster currency gains to curb
persistent price pressures, most Asian policy makers are holding
or cutting interest rates to bolster their economies.

“The developments in Europe pose a significant downside
risk to Singapore’s economy,” said Euben Paracuelles, a
Singapore-based economist at Nomura Holdings Inc. “It’s hard
for Asia to escape the repercussions if there’s a European
recession and it’s accompanied by financial market instability
and a banking crisis,” he said, adding Singapore’s growth
outlook beyond the second quarter “is very poor.”

The Singapore dollar rose 0.3 percent to S$1.2651 against
its U.S. counterpart at 9:39 a.m. local time today. It is the
region’s best performer this year, gaining about 2.5 percent.

‘Downside Risks’

Japan’s economy expanded faster than economists predicted
in the first quarter, propelled by reconstruction spending, a
report showed today. GDP rose an annualized 4.1 percent.

Singapore maintained its forecast for GDP growth of 1
percent to 3 percent this year. The island’s exports rose 8.3
percent in April, beating the median estimate of economists, as
manufacturers shipped more petrochemicals and sales to China
rebounded, a separate report showed.

“Singapore’s growth momentum has picked up, anchored by a
strong upturn in the manufacturing sector,” the Trade Ministry
said. “Nevertheless, the recovery in the global economy remains
fragile and vulnerable to downside risks.”

A “disorderly sovereign debt default in the Eurozone”
that would hurt the global economy and Singapore’s export-
dependent industries cannot be ruled out, the ministry said.

Ripple Effects

A Greek caretaker government will prepare new elections,
probably on June 17, that may decide whether the country should
remain a euro member. World Bank President Robert Zoellick said
yesterday that a Greek exit from the euro could have ripple
effects reminiscent of 2008, when Lehman Brothers Holdings
Inc.’s collapse was followed by a global financial crisis.

The consequences of a Greek euro exit would be
“unimaginable” and “catastrophic” for Europe, Malaysia’s
central bank Governor Zeti Akhtar Aziz said in an interview with
Bloomberg Television aired today. Several U.S. Federal Reserve
policy makers said a loss of momentum in growth or increased
risks to their economic outlook could warrant additional action
to keep the recovery going, minutes of their April meeting
released yesterday showed.

Singapore’s central bank, which uses the exchange rate to
manage inflation, said last month it will increase “slightly”
the slope of the currency trading band, and raised its forecast
for consumer-price gains to 3.5 percent to 4.5 percent in 2012.
Minister for Trade and Industry Lim Hng Kiang said this week
inflation is estimated to remain at about 5 percent in the next
few months.

The Monetary Authority of Singapore guides the local dollar
against a basket of currencies within an undisclosed band. It
adjusts the pace of appreciation or depreciation by changing the
slope, width and center of the band.

Price Pressures

The central bank also restored a narrower policy band for
the currency last month, a move that Deputy Managing Director
Ong Chong Tee told reporters today was appropriate as inflation
will peak or slow for the rest of the year.

Higher oil costs, rising housing rents, more expensive
private transportation and unemployment near a three-year low
have sustained price pressures in the city state. Economic
expansion has also been supported by rising tourist arrivals and
construction demand.

GDP increased 1.6 percent from a year earlier last quarter,
after rising 3.6 percent the previous three months. The
expansion matched an April government estimate and compared with
the median forecast of a 1.8 percent gain in a Bloomberg survey.
The economy contracted 2.5 percent in the fourth quarter from
the previous period.

Vulnerable to Fluctuations

“While it all appears good and rosy, downside risks in the
global environment have once again re-emerged,” Irvin Seah, an
economist at DBS Group Holdings Ltd. in Singapore, said before
the report. “A pullback in Singapore’s GDP growth in the second
quarter should not be a surprise.”

Singapore, located at the southern end of the 600-mile
(965-kilometer) Malacca Strait and home to one of the world’s
busiest container ports, has remained vulnerable to fluctuations
in overseas demand for manufactured goods even as the government
boosts the financial services and tourism industries to reduce
reliance on exports.

Weaker European demand is particularly troubling for
countries including Singapore, Thailand and South Korea, where
overseas sales make up the equivalent of half or more of gross
domestic product. China’s exports rose less than estimated in
April, while Philippine and Malaysian shipments unexpectedly
fell in March, reports earlier this month showed.

Singapore’s manufacturing fell 1 percent from a year
earlier last quarter, after climbing 9.2 percent in the three
months ended Dec. 31, the Trade Ministry said today. The
services industry grew 2.2 percent, while construction expanded
7.7 percent.

To contact the reporter on this story:
Shamim Adam in Singapore at
sadam2@bloomberg.net

To contact the editor responsible for this story:
Stephanie Phang at
sphang@bloomberg.net

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Article source: http://www.bloomberg.com/news/2012-05-17/singapore-warns-of-europe-default-risk-as-economy-expands-10-.html

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European businesses in VN 'still wary' – Vietnam Business Economy …

The EuroCham Business Climate Index for April/May 2012 to be released today fell by three points to 53.

European businesses that took part in the survey continued to be cautious about their business outlook and in assessing their current situation as well as the overall economic outlook in Viet Nam.

Of them, 44 per cent are in the services industry, 28 per cent in manufacturing, 20 per cent in trading, and the rest in others.

There was a 10 percentage point increase to 29 per cent in respondents assessing their current business situation as “not good”. It had been only 12 per cent a year ago.

The percentage of companies describing their current business situation as “good” was 34 per cent, unchanged from the last survey but down from 50 per cent a year ago.

No respondents described the current situation as “excellent”.

Asked about their expected number of orders and revenues in the medium term, the answers were mixed – 58 per cent expected an increase in revenues, a solid increase from last quarter when it was 47 per cent.

The number of businesses expecting revenues to fall remained unchanged at 22 per cent. Only 18 per cent expected revenues to remain constant, down from 27 per cent.

Overall, this represents an upward trend in the outlook on orders and revenues.

But it has yet to have an effect on recruitment plans with 46 per cent of companies wanting to maintain their current level of staff.

Only a third wanted to increase their staff, a 7 per cent fall from last quarter, while 19 per cent were planning to lay off employees, up from 14 per cent last quarter.

The signs of optimism in business outlook seen in the last survey remained largely unchanged, with 38 per cent saying “good” and 36 per cent remaining “neutral”.

This was almost unchanged from the last quarter, but is put into perspective by the 51 per cent of respondents who had a positive outlook this time last year.

Twenty-six per cent had a pessimistic outlook.

The results are still not decidedly positive and little is seen in the form of recovery of business outlook. It is worrying that 62 per cent assessed their outlook as either “neutral” or negative.

When asked about their investment plans for 2012, many respondents continued to be cautious: 34 per cent wanted to maintain their level of investments and 38 per cent were looking to increase them.

In the last survey only 36 per cent had wanted to increase their investments, but the number had been 59 per cent last year.

This shows a continuation of the trend that businesses are getting more cautious about investing.

From 24 per cent last quarter, the proportion of businesses looking to reduce their overall investment in the country rose to 28 per cent.

Though majority of companies are looking to maintain or increase their investments in the country, it is worrying that nearly a third of companies are considering a reduction.

Inflation concerns

The estimate for the expected depreciation in the dong was 5.63 per cent, down from 8.33 per cent last quarter, hinting at confidence in the Government’s measures to curb inflation.

But 57 per cent still saw inflation as a major concern or even threat to their business operations in Viet Nam, slightly less than the 61 per cent last time.

When asked about the difficult economic situation in Viet Nam, 45 per cent expected “stabilisation and improvement” of the current situation (up 10 per cent from last quarter).

Though it points towards an increase in confidence, 55 per cent of respondents still expected the overall economic situation to deteriorate further.

Dollar, Yen Aim Higher as Risk Appetite Continues to Evaporate …

Talking Points

US Dollar, Japanese Yen Ride Haven Demand Higher Overnight
Moody’s Downgrades 16 Spanish Banks, Fanning Euro Crisis Flames
European, US Stock Index Futures Point to Continued Risk Aversion

The US Dollar and Japanese Yen outperformed overnight, rising against their major counterparts as Asian stocks followed Wall Street lower, driving demand for the go-to safe haven currencies. The MSCI Asia Pacific regional benchmark index fell 2.5 percent, erasing 2012 year-to-date gains. The sentiment-linked Australian and New Zealand Dollars suffered the bulk of the rout, sliding as much as much as 0.8 percent apiece against their leading counterparts.

The selloff came on the back of a broadly disappointing set of US economic data – which dented the outlook for regional exporters heavily reliant on demand from the world’s largest consumer market – as well as mounting Eurozone woes. Moody’s downgraded 16 Spanish banks, citing the weak economy and mounting government debt. The announcement stoked fears that lenders in the Eurozone’s fourth-largest economy (and possibly elsewhere) may buckle as Greek-linked jitters grow into a region-wide panic.

Looking ahead, stock index futures tracking key US and European equity benchmarks are pointing sharply lower in late Asian trade, pointing to continued risk aversion into the week-end. The European economic calendar is relatively uneventful, with German PPI figures amounting to the only bit of notable event risk. The US data docket is empty altogether, suggesting that little stands in the way of existing momentum.

Asia Session: What Happened

Euro Session: What to Expect

Critical Levels

— Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow me on Twitter at @IlyaSpivak

To be added to Ilya‘s e-mail distribution list, send a note with subject line “Distribution List” to ispivak@dailyfx.com

Friday's Session Kicks Off in Apocalyptic Fashion; Where is the …

Panic, fear and uncertainty take hold of markets
Euro looking to establish below 2012 lows from January
Yen starts to find renewed bids on flight to safety status
Eurozone political turmoil fuels intensified risk off trade
Rating agency downgrades and Greek political developments weigh

The risk liquidation continues into Friday, and markets to this point have shown no real interest in any form of a bounce. The US Dollar and Yen have been the prime beneficiaries on their flight to safety status, while the Swiss Franc is still not participating given the aggressive SNB intervention measures. We wonder how much it is costing the SNB to keep the EUR/CHF cross propped above 1.2000, especially in these intense risk-off markets. At this point, the Euro should accelerate to test the yearly lows from January by 1.2625, although any additional declines from there would be hard to comprehend in light of the severely oversold daily technical studies.

Elsewhere, US equities are now testing some key support levels, while gold has finally found some bids ahead of $1500. It certainly isn’t common to see so many analysts bearish on the Euro and risk in general. We have seen even the most aggressive Euro bulls retract their positions, and these include some larger banks, hedge funds and even central banks.

Moving on, Moody’s downgrade of 16 Spanish banks, along with Spanish yields rising back above 6% has not helped matters, while comments from Greek SYRIZA leader Tsipras that his party will not join the any pro-bailout coalition only weighs further on risk sentiment. European leadership needs to step up and offer a solution; otherwise, we could see additional risk liquidation over the coming hours. It is more than likely that the burden will fall on the European Central Bank, and the introduction of a Eurobond or additional bond buying could offer some relief. Other tools at the ECB’s disposal include the LTRO and the ability to cut rates, both of which would also likely be viewed as a risk positive. One thing is for sure, the G8 Summit kicks off today and we should expect nothing from this front in terms of any helpful solutions.

ECONOMIC CALENDAR

Fridays_Session_Kicks_Off_in_Apocalyptic_Fashion_Where_is_the_Bottom_body_Picture_5.png, European Central Bank and European Leadership Need to Step Up Now

TECHNICAL OUTLOOK

Fridays_Session_Kicks_Off_in_Apocalyptic_Fashion_Where_is_the_Bottom_body_eur.png, European Central Bank and European Leadership Need to Step Up Now

EUR/USD:The market remains under intense pressure and the focus for now is squarely on a retest of the 2012 lows from January at 1.2625. While we would not rule out a possibility of a test of this level over the coming sessions, short-term technical studies are well oversold and are showing a need for some form of a corrective bounce from where a fresh lower top is sought out. Ultimately however, any rallies should now be very well capped by previous support turned resistance at 1.3000 in favor of additional weakness over the medium-term that projects deeper setbacks into the lower 1.2000?s.

Fridays_Session_Kicks_Off_in_Apocalyptic_Fashion_Where_is_the_Bottom_body_usd.png, European Central Bank and European Leadership Need to Step Up Now

USD/JPY:The market continues to consolidate around 80.00 and is in the process of looking for a medium-term higher low ahead of the next major upside extension back above the yearly highs at 84.20 and towards 90.00 further up. However, for the time being it remains in question whether the market will still head lower towards the 200-Day SMA by 78.50 before ultimately reversing higher. The key level to watch above comes in by 80.60, and a break and close above this level will officially alleviate downside pressures and suggest that a higher low has now been carved in the 79.00?s.

Fridays_Session_Kicks_Off_in_Apocalyptic_Fashion_Where_is_the_Bottom_body_gbp.png, European Central Bank and European Leadership Need to Step Up Now

GBP/USD:The market remains under intense pressure since breaking back below 1.6000 and setbacks could now extend towards next key support in he 1.5600 area over the coming sessions. Still, daily studies are now stretched and we would prefer looking to sell into rallies towards 1.5900 where a fresh lower top is sought out.

Fridays_Session_Kicks_Off_in_Apocalyptic_Fashion_Where_is_the_Bottom_body_usd_1.png, European Central Bank and European Leadership Need to Step Up Now

USD/CHF:Overall the structure remains highly constructive and we continue to project additional upside over the coming months back above parity. For now, the latest break and close above 0.9335 is expected to accelerate gains for a retest of the yearly highs by 0.9600, while any intraday pullbacks should be very well supported ahead of 0.9200. Ultimately, only back under 0.9000 would negate outlook and give reason for pause.

— Written by Joel Kruger, Technical Currency Strategist

To contact Joel Kruger, email jskruger@dailyfx.com. Follow me on Twitter @JoelKruger

To be added to Joel Kruger’s distribution list, send an email with subject line “Distribution List” to jskruger@dailyfx.com

Here's How Approach Resources May Be Failing You | Avid Investor …

Margins matter. The more Approach Resources (Nasdaq: AREX ) keeps of each buck it earns in revenue, the more money it has to invest in growth, fund new strategic plans, or (gasp!) distribute to shareholders. Healthy margins often separate pretenders from the best stocks in the market. That’s why we check up on margins at least once a quarter in this series. I’m looking for the absolute numbers, so I can compare them to current and potential competitors, and any trend that may tell me how strong Approach Resources’s competitive position could be.

Here’s the current margin snapshot for Approach Resources over the trailing 12 months: Gross margin is 82.2%, while operating margin is 12.8% and net margin is 6.3%.

Unfortunately, a look at the most recent numbers doesn’t tell us much about where Approach Resources has been, or where it’s going. A company with rising gross and operating margins often fuels its growth by increasing demand for its products. If it sells more units while keeping costs in check, its profitability increases. Conversely, a company with gross margins that inch downward over time is often losing out to competition, and possibly engaging in a race to the bottom on prices. If it can’t make up for this problem by cutting costs — and most companies can’t — then both the business and its shares face a decidedly bleak outlook.

Of course, over the short term, the kind of economic shocks we recently experienced can drastically affect a company’s profitability. That’s why I like to look at five fiscal years’ worth of margins, along with the results for the trailing 12 months, the last fiscal year, and last fiscal quarter (LFQ). You can’t always reach a hard conclusion about your company’s health, but you can better understand what to expect, and what to watch.

Here’s the margin picture for Approach Resources over the past few years.

anImage

Source: S&P Capital IQ. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Because of seasonality in some businesses, the numbers for the last period on the right — the TTM figures — aren’t always comparable to the FY results preceding them. To compare quarterly margins to their prior-year levels, consult this chart.

anImage

Source: S&P Capital IQ. Dollar amounts in millions. FQ = fiscal quarter.

Here’s how the stats break down:

Over the past five years, gross margin peaked at 86.0% and averaged 81.9%. Operating margin peaked at 47.2% and averaged 18.9%. Net margin peaked at 29.3% and averaged 8.6%.
TTM gross margin is 82.2%, 30 basis points better than the five-year average. TTM operating margin is 12.8%, 610 basis points worse than the five-year average. TTM net margin is 6.3%, 230 basis points worse than the five-year average.

With recent TTM operating margins below historical averages, Approach Resources has some work to do.

Over the decades, small-cap stocks like Approach Resources have provided market-beating returns, provided they’re value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in “Too Small to Fail: Two Small Caps the Government Won’t Let Go Broke.” Get instant access to this free report.

Add Approach Resources to My Watchlist.

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European businesses in VN 'still wary' – Vietnam Business Economy …

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Dollar, Yen Aim Higher as Risk Appetite Continues to Evaporate …

Talking Points US Dollar, Japanese Yen Ride Haven Demand Higher Overnight Moody’s Downgrades 16 Spanish Banks, Fanning Euro Crisis Flames European, US Stock Index Futures Point to Continued Risk Aversion The US Dollar and Japanese Yen outperformed overnight, rising against their major counterparts as Asian stocks followed Wall Street lower, driving demand for the go-to … Continue reading

Friday's Session Kicks Off in Apocalyptic Fashion; Where is the …

Panic, fear and uncertainty take hold of markets Euro looking to establish below 2012 lows from January Yen starts to find renewed bids on flight to safety status Eurozone political turmoil fuels intensified risk off trade Rating agency downgrades and Greek political developments weigh The risk liquidation continues into Friday, and markets to this point … Continue reading

Here's How Approach Resources May Be Failing You | Avid Investor …

Margins matter. The more Approach Resources (Nasdaq: AREX ) keeps of each buck it earns in revenue, the more money it has to invest in growth, fund new strategic plans, or (gasp!) distribute to shareholders. Healthy margins often separate pretenders from the best stocks in the market. That’s why we check up on margins at least … Continue reading

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