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BTS: Ekonomi Semakin Bercelaru
By Kapal Berita

3/1/2001 7:57 pm Wed

Lapuran Bernama berikut menyebut tambang untuk sistem STAR dan PUTRA LRT mungkin akan dinaikkan. BTS Singapura meramalkan iklim ekonomi mungkin tidak menyenangkan akibat kecelaruan dalam gabungan sistem perbankan. Sebelum ini kita dimaklumkan tambang bas sudah dinaikkan - samada bas persekolahan ataupun bas yang berkeliaran di pusat bandar (sistem tambang mengikut zon). MAS yang dibeli kembali baru-baru ini mungkin akan melakukan sesuatu kepada tambang dan para jemaah haji perlu menyediakan wang yang lebih sedikit untuk menunaikan ibadat fardhu itu tahun ini.

Ekonomi di Amerika Syarikat dijangka lembab dan tidak menentu dan ia akan mempengaruhi sentimen pasaran negara ini. Korea dijangka menjadi kayu pengukur prestasi ekonomi rantau Asia sebelah sini manakala negara Cina pula mendapat perhatian istimewa para pelabur kerana kestabilan dan kemurahan tenaga.

Kita jangkakan inflasi akan menghinggap bumi Malaysia yang tercinta ini dan bank akan mengeluh lagi. Malaysia akan dipenuhi kembali oleh penerbangan projek yang terbengkalai sebagai ubat mee segera untuk kroni. Rakyatlah nanti yang menanggung semua ini....... Itu lah 'kepandaian' pak menteri menguruskan ekonomi.

January 01 , 2001 18:57PM

Govt will not neglect welfare of Mas workers

KUALA LUMPUR, Jan 1 (Bernama) -- The government, which has bought over 29.09 per cent of Naluri Berhad's stake in Malaysia Airlines (MAS), will put first the welfare of MAS staff, said Prime Minister Datuk Seri Dr Mahathir Mohamad.

When privatising the national flag carrier, the government made it a pre-condition that none of the staff should be displaced unless they themselves chose to leave MAS, he said.

"We'll look after them. We've never let workers down," Dr Mahathir told reporters who approached him on the matter at the People's Progressive Party open house and new year reception at the Putra World Trade Centre here Monday.

Malaysia was unlike some other countries which absconded its obligations to workers upon a privatisation exercise on the excuse of cutting down on costs or improving efficiency, the prime minister said.

He was asked on the fate of MAS workers upon the government's re-purchase of the 29.09 per cent in MAS held by Naluri Berhad last Dec 20 at RM8 a share or for RM1.792 billion.

The prime minister was also asked who would replace Naluri's owner Tan Sri Tajudin Ramli as MAS executive chairman following the government's take over or Naluri's stake in the airline.

Dr Mahathir said he had no idea as the matter was being handled by Finance Minister Tun Daim Zainuddin.

Citing Telekom Malaysia as an example, Dr Mahathir said the privatisation of several government agencies had so far been a success.

In fact, he said, Klang Container Terminal (KCT) and Northport workers have also requested for their entities to be privatised as they believed such a move would be better for them income-wise.

Dr Mahathir indicated that as for the next exercise, the government was mulling over privatising public transportation within Kuala Lumpur.

Despite government's assistance, companies operating public transportation in the capital city suffered losses because of high operating costs compared to cheap fares, he said.

Dr Mahathir hinted that restructuring of the city's public transportation may involve raising the fares. - BERNAMA

Economists warn stocks may plunge after bank merger delayed

KUALA LUMPUR, Jan 1 (AFP) - 16:32 - Economists Monday expressed disappointment over the failure by some Malaysian banks to meet a year-end merger deadline, amid calls on the government to issue punishments.

Only six out of 10 core banking groups successfully met the government-directed merger programme, the central bank said Sunday, while three banking groups were in the final stages of merger completion.

Last February the central bank announced that it had approved the merger of all 54 of Malaysia's banks and finance houses into 10 groups in order to strengthen the sector against international competition. Mergers were to be completed by December 31.

Ramon Navaratnam, former deputy secretary general of the treasury expressed disappointment that the merger was not completed by the planned deadline.

"It is disappointing. Banks have been given a long time to negotiate and merge.

"Sometimes the authorities must use the stick," he told AFP.

Navaratnam, who is now corporate adviser to construction giant Sungeiway Group, said the delays were unfair to banks which met to the deadline, adding that those who failed to merge "should be penalised."

"They should have worked out a compromise. Others have succeeded," he said.

Bank Negara Malaysia named the 10 "anchor" banks as Malayan Banking (Maybank), Bumiputra-Commerce Bank, RHB Bank, Public Bank, Arab Malaysian Bank, Hong Leong Bank, Perwira Affin Bank, Multi-Purpose Bank, Southern Bank and EON Bank.

An anchor bank is a lead bank which groups together other banks and financial institutions.

The central bank Sunday said 50 of the 54 banks have been grouped into 10 core banking groups.

"Effectively, 94 percent of the total assets of the domestic banking sector have been rationalised and consolidated," it said.

The Arab-Malaysian Banking Group -- a core banking group -- which terminated a sale and purchase agreement with Utama Banking Group has been allowed to begin talks with Danamodal Nasional Bhd. on a possible merger with MBf Finance Bhd.

Danamodal which took over MBf is Malaysia's national bank recapitalisation agency.

The central bank also approved a similar agreement between Multi-Purpose Bank Bhd. and MBf Finance Bhd. to be terminated. It also allowed Utama Banking Group to begin merger talks EON Bank Bhd., which is already an anchor bank. It did not set a new deadline.

The central bank said the agreement between Malayan Banking Bhd. and Phileo Allied Bhd. for the acquisition of Phileo Allied Bank has been extended by 21 days.

Navaratnam said the central bank must set a new time frame for the banks to resolve their impasse and merge.

"They must be pushed to comply within a new deadline of one to three months," he said.

Navaratnam said failure by the central bank get tough to overcome any deadlock could cause others to unwind their mergers.

"The rules must be applied with consistancy. Otherwise it would reflect weak governance," he said.

An economist with a foreign bank expressed fears that financial stocks, especially banks that failed to merge may take a beating when the bourse opens Tuesday.

"Finance stocks may plunge by one to two percent," he warned.

The economist, who requested anonymity, said he was suprised that even the country's top bank Maybank failed to complete the merger exercise.

"If Maybank is unable to meet the extended 21-day deadline, the whole banking merger exercise can be regarded as a failure," he said.

The economist said negative sentiments would emerge on banks that canceled their sales and purchase agreement as it would reflect badly on its management.

The failure by some banks to merge reflects on the central bank as being "not an efficient controller," since they had initially said the merger deadline would be met.

From The Business Times, Singapore
2nd January 2001

KL stocks: brighter outlook in H2 [? - Editor]

<>Market expected to move sideways rather than downwards in Q1


THE year 2001 is expected to be a very challenging one for the Kuala Lumpur Stock Exchange, The Star reported yesterday. It cited analysts saying that in the first quarter, the market is likely to move sideways, and that prospects will only start to improve in the second half.

Generally, analysts are in a limbo over the outlook of the KLSE due to uncertainties in the US and Japanese economies.

Sentiments were further bruised when the much anticipated window dressing on the last trading day of December 26, 2000, did not take place.

However, all is not lost. The report quoted analysts saying that if the US were to hit a recession, a wave of funds may flow into this region in the second half.

Also Prime Minister Mahathir Mohamad predicts a 5 per cent gross domestic product (GDP) growth next year, considered healthy by analysts.

Jupiter Securities head of research Pong Teng Siew expects the market to stabilise in the first quarter and improve in the second half this year when domestic liquidity improves. "We expect the local stock market to move sideways rather than downwards," Mr Pong said.

He expects the Composite Index to hover around 760 to 770 points in the first quarter of this year, and he also thinks there could be a modest Chinese New Year rally.

But Perdana Merchant Bankers Bhd first vice-president (investment) Tan Kee Keat is not banking on a Chinese New Year rally. However, Mr Tan expects the market to improve in the second half.

Asked for full year predictions, Mr Tan said: "It is a tough call to make unless the picture becomes clearer in the US as a lot depends how things will unfold there.

"We are going to see a quiet period for equities worldwide this year. But we hope that will not be the case, and a soft landing in the US would be ideal. In fact, every time the US Federal Reserve cuts interest rates, there is an even chance of going into a soft landing," said Mr Pong.

Talk of a soft landing in the US economy is fast evaporating. Analysts there are predicting a semi-hard (GDP of 2.5 per cent) to hard (GDP zero) landing in the US.

They also expect interest rate cuts of about 75 basis points over a three to six months period.

If that happens, the US funds will need new markets to invest in, and the Asian region is an ideal location, the Star report said.

However, one potentially sore spot is that the Japanese economy is not improving. The recession in Japan is worsening, and that may drag the region down a bit, the analysts felt.

For full year 2000, the KLSE Composite Index fell 154 points from its close of 833 on Jan 3, 2000, to 679 points on Dee 26, 2000.

Compared to regional markets, the KLSE was not worse off. In fact, it only fell 18 per cent in the year 2000 compared to Seoul which was down 52 per cent, Tokyo (down 27 per cent), Hong Kong (13 per cent), Singapore (25 per cent), Thailand (45 per cent), Taiwan (GINO), Indonesia (38 per cent), and the Philippines (32 per cent).

That would also make Malaysia less attractive compared to Seoul (Seoul would be cheaper) if there is a wave of money flowing back to the region from US and Europe.

For foreign funds to return, Mr Tan of Perdana Merchant said the government should make more effort to improve corporate governance, the main concern of foreign investors.

A dealer added that government linked agencies should not support the market and let it fall to 600 which will make it attractive for foreign funds to enter the market.

"We believe the performance of the KLSE will be more internally driven, with reduced influence from foreign investors," he said.

"There is no longer the Morgan Stanley Capital International (MSCI) index boost as seen in early 2000," said, an online financial portal.

"We believe foreign interest would be relatively muted in the short term," Surf88 said.

Mr Tan said fundamentals and valuations would prevail and not speculation. The theme this year should be to go for selected stocks with healthy earnings per share.

"Stocks such as Malaysian Airports Holding Bhd, Konsortium Logistic Bhd and Johor Port Bhd will benefit from increased cargo volume," he said.

A dealer said YTL Corp, YTL Power, AMMB Holdings Bhd, RHB Capital and telecom stocks such as DiGi.Com were good picks.

Mr Pong said even though technology stocks worldwide were expected to experience slow growth, those in Malaysia would be driven by government spending on the Multimedia Super Corridor flagship projects.

Jan 01, 2001

Asia 'can weather US slowdown'

Weakening demand for IT goods will put a drag on growth but is unlikely to lead to recession, say economists

TOKYO - After a dream start to the new millennium, Asia's economies are heading for a rude awakening this year, as the impact of a sharp slowdown in US growth hits home.

No one is predicting a repeat of the crippling recession ushered in by the region's 1997 balance-of- payments crisis: Trade balances remain strong, foreign debt has been cut, currencies are not overvalued and foreign exchange reserves are high.

Asia, thus, has a plump cushion to soften the blow of a long-feared weakening in US capital expenditure on the information technology (IT) goods in which the region specialises.

This year and next, East Asian economies 'are likely to slow down substantially', said Mr Tomoo Kinoshita of Nomura Research Institute's Asian economic research unit.

'But this does not mean East Asia is headed towards recession. The most likely scenario is for growth to slow to a pace more consistent with potential economic growth rates.'

Asia will be coming back to earth after two strong years of export-led recovery, with the US as the main locomotive.

US imports of IT from Asia last year are expected to reach US$130 billion (S$224.9 billion), 5 per cent of the region's gross domestic product (GDP), up from US$29 billion in 1990, according to Morgan Stanley Dean Witter.

IT demand is worth one percentage point of the 7.8 per cent Asian growth forecast by Morgan Stanley for last year.

US consumption will account for another percentage point of Asia's growth.

A slowdown after US' record boom was inevitable.


What disappoints economists is that policymakers did not make better use of the interval of strong growth to push through banking and corporate reforms.

If they had been more forceful, domestic consumption and investment would be more buoyant now, and thus able to take up some of the slack left by sagging exports.

'The growth slowdown has just started, and given that external conditions are not likely to be particularly friendly, the upward turn in the Asian business cycle will depend on resurrecting domestic demand,' UBS Warburg economists wrote in their Asian Economic and Strategy Perspectives for last month.

'That will require accelerated reforms. Both history and current policy and political imperatives suggest that most likely, this is wishful thinking.'


South Korea is perhaps the best barometer of Asia's economic roller-coaster ride.

After almost going bust, Seoul signed a US$58 billion bail-out plan with the International Monetary Fund (IMF) on Dec 4, 1997, that led to a spectacular rebound in growth.

The three-year IMF programme ended last month, yet the financial and corporate reforms demanded by the fund are, by the admission of Finance Minister Jin Nyum, only half-complete.

Growth, moreover, is grinding to a halt. Prices for semiconductors, the country's main export, are depressed, while its oil bill has surged. Unemployment is rising again, and both industrial production and consumer spending are falling.

Although Mr Jin said that another meltdown was possible, economists are less pessimistic.

'Is this the beginning of a replay of the 1997-98 crisis? Hardly. The downturn under way is best characterised as a more traditional cyclical downswing, following a vigorous post-crisis boom,' said Ms Jiwon Lim, an economist with JP Morgan in Seoul.

Still, the pain is real. With exports accounting for 40 per cent of South Korea's GDP, the economy is likely to contract this quarter, she wrote in a research note.

The central bank expects growth this year to slow to 5.3 per cent, from 9.3 per cent last year, but Ms Lim said the figure could be closer to 3 per cent if there is a hard landing in the US.

Goldman Sachs downgraded recently its growth forecast for South Korea next year to 4 per cent from 5.5 per cent, but it does not believe Seoul is on the verge of a new currency crisis.

'Foreign exchange reserves exceed US$92 billion, and Korea is still racking up monthly surpluses of US$1-US$1.5 billion on the trade account,' said Goldman economist Sun Bae Kim.

South Korea is emblematic in other ways of the wrenching changes Asia is undergoing. For instance, the epic struggle of its deeply indebted family-owned conglomerates to keep creditors at bay is repeated daily across the region.

The country's attempts to nurse its battered financial system back to health are also mirrored throughout Asia. The difficulty facing reformers was underlined last month when the country's largest commercial bank, Kookmin Bank, had to halt government-backed merger talks with its largest mortgage bank, Housing and Commercial Bank, in the face of union protests.

In fact, with the government due to inject yet more capital into the banking sector early this year, South Korea has grasped the nettle of financial reform more firmly than many of its neighbours.

As a result, bank-lending to the private sector is rising again.

Mr Michael Spencer of Deutsche Bank in Hongkong said data suggest Malaysian banks are on the mend, too. But banks in the Philippines, Taiwan and Thailand are still cutting back, judging that lending to private borrowers is too risky.

'Until banks start intermediating risk capital, and unless financing is to be turned over entirely to offshore institutions, economic growth in these countries is unlikely to return to anything near potential,' he wrote in Deutsche's World Outlook for next year.

The other side of the lending equation is a lack of credit-worthy borrowers. As Hyundai illustrates, too many firms are still hobbled by huge debts incurred to finance investments in better times that are now simply no longer viable.

But weak bankruptcy and foreclosure laws, coupled with the political difficulty of taking on vested interests, are keeping thousands of walking dead companies across Asia in business, thereby preventing capital from being re-allocated to better use.

'Without massive reduction in the debt overhang of the corporate sector or further significant progress in banking sector recapitalisation, the current growth momentum in South-east Asia risks reform, running out of steam,' said Mr Wong Chee Seng of DBS Bank.

Asia would be placed better to cope if Japan, the world's second-largest economy, was not in the doldrums. Instead, recent business surveys show the economy already turning down after a brief, half-hearted recovery in the first half of last year.

'At the very least, the momentum is peaking out. Whether we are going into recession is less obvious,' said Mr Peter Morgan, a senior economist with HSBC Securities in Japan.


With most analysts sceptical that Japan can rise from its sick bed as long as the gerontocracy of the ruling Liberal Democratic Party clings to power, China is likely to grow both in political and economic importance to the rest of the region.

Noting that China makes up 45 per cent of non-Japan Asia's economy, Mr Andy Xie of Morgan Stanley said China is the one country in the region that has attracted sufficient capital to permit it to boost domestic demand and so offset export weakness.

'We expect China to remain a source of stability,' he said in a note to clients. 'The additional scope for infrastructure spending provides further insurance against a shortfall in economic growth.' --Reuters