Najib and Muhyiddin, are you still sleeping?

Two news that caught my attention this morning which has confirmed the fact that Malaysia economy is faltering further as Najib Razak and Muhyiddin Yassin are not doing enough to bring Malaysia economy out of recession.

Malaysia economy is now lagging behind Asean countries such as Singapore, Thailand and Indonesia, while our stock market has seen the net outflow in July 2009 when most countries in Asia have enjoyed significant funds inflow. Please do not forget that stock markets always run ahead of the real economy and provide good indicator of a country's economic health.

We still have not seen any concerted efforts/strategies carried out by the top two Malaysia leaders in order to tackle the economy woes. Najib still has time for overseas vacation while Muhyiddin spending most of his time in Permatang Pasir for the sake of UMNO's political gain.

So far, the RM67 billion stimulus package is a failure as it has not benefited the rakyat. The recent polls conducted by a NGO has showed that 70% of the respondent has not feeled the impact of the stimulus package.

Feel Sad?

Malaysia Q2 GDP seen down 5.1pc on year

Malaysia’s economic recovery looks set to lag that of its peers, with economists saying gross domestic product likely shrank by 5.1 per cent in the second quarter from a year ago, a Reuters poll showed.

In addition to a steep fall in exports, Malaysia has seen capital spending stagnating as well as an inventory destocking to the tune of US$15 billion in the first quarter, retarding a recovery, according to a recent report from BNP Paribas.

Malaysia posted its first drop in output in seven and a half years when first quarter GDP fell 6.2 per cent from a year ago, and the poll of 12 economists showed that Malaysia’s central bank would hold rates at 2 per cent until there was firm evidence of an economic recovery.

The central bank’s next policy meeting is on today, with the GDP data to be released on tomorrow.

Malaysia’s central bank and the government are expecting growth to return only in the fourth quarter, whereas in Indonesia growth has already picked up and is expected to return in Thailand when it reports second quarter data next week.

Japan, Hong Kong and Singapore also pulled out of recession in the second quarter, but the recovery is seen as fragile as long as consumer demand in Asia’s key Western markets remains weak.

“While central bankers are often prompted to ’take away the punch bowl just as the party gets going’, the degree of uncertainty and prolonged nature of the recovery could prompt Bank Negara Malaysia to leave the rate (steady) until end-2010,” said Standard Chartered Economist Alvin Liew said.

Economists say that a fiscal stimulus package of RM17 billion this year has yet to have a major impact and the economy has also sunk into deflation with consumer prices falling 2.4 per cent year-on-year in July.

The central bank has cut rates by a cumulative 150 basis points in its recent easing cycle in a bid to ease the domestic fallout from the global financial crisis.

Malaysia is Asia’s third-most trade dependent country. June exports fell by 22.6 per cent on an annual basis but rose 5.1 per cent increase from May on a seasonally unadjusted basis. - Reuters


Foreign Funds Sold Malaysia Stocks in July, CIMB Says
(Update1)2009-08-25 03:51:50.955 GMT
By Chan Tien Hin

Aug. 25 (Bloomberg) -- Overseas investors turned netsellers of Malaysian stocks in July for the first time in four months, as the Southeast Asian nation’s stock market continued to lag behind regional peers, CIMB Investment Bank Bhd. said.

Foreign funds unloaded $121 million of Malaysian shares in July, the equivalent of 56 percent of the previous three months’inflow, CIMB analyst Terence Wong said, citing EPFR Global,which collects data from more than 600 foreign funds.

The reversal of fund flows is an “unwelcome surprise for us” and the outflow was “relatively steep,” he said in the report.

“ All its regional peers enjoyed foreign fund inflows in July.”

The benchmark FTSE Bursa Malaysia KLCI Index has risen 34percent this year, trailing behind Southeast Asian benchmark indexes.

Neighboring Indonesia’s gauge has jumped 75 percent.Prime Minister Najib Razak, who took office on April 3, has announced stimulus plans valued at 67 billion ringgit ($19billion) to revive economic growth.

Najib on June 30 announced his biggest overhaul of the financial markets, scrapping the need for overseas companies and for publicly traded Malaysian businesses to reserve 30 percent of their equity for local ethnic Malay investors.

The key stock index fell 0.3 percent to 1,170.96 as of11:51 a.m. local time, the first drop in four days.

Foreign funds “lightened” their holdings in stocks suchas Genting Malaysia Bhd., Digi.Com Bhd. and PLUS Expressways Bhd., he said.


Funds added to weightings in banks including Public Bank Bhd., Malayan Banking Bhd. and RHB Capital Bhd., he said.


“Malaysia’s lower liquidity and velocity could be a symptom or cause, of foreign investors’ lack of interest in the market,” Wong said.


“The net selling could be a temporary hiccup that is consistent with past trends where it was relatively rare for foreign funds to be net buyers for more than three months running.”