SHANGHAI: Chinese shares closed slightly lower on Wednesday to end the year down 65.5 percent -- the steepest annual loss in the market's 18-year history.
The massive plunge has made China one of the worst performing major stock markets this year as the global financial crisis continues to wreak havoc, traders said.
Wednesday, December 31, 2008
Malaysia may spend more to boost economy in 2009
KUALA LUMPUR, Malaysia (AP) — Malaysia's prime minister-in-waiting says he may use another fiscal package to stimulate the sagging economy, warning that the global financial meltdown could result in job losses at home in 2009.
"What we are facing are the effects of a global meltdown which will impact on our economy adversely," Deputy Prime Minister Najib Razak said in an interview published in the latest issue of The Edge business weekly.
He said that as a result of the global economic slowdown, Malaysia may have to face businesses "downsizing and retrenchment of workers in the private sector."
"But there is a saving grace - inflation is expected to moderate next year" because of falling fuel prices, he said.
Inflation could be in the region of about 4.0 per cent or less in 2009, according to Najib. Inflation in July and August hit its highest level in nearly three decades at 8.5 percent.
"What we are facing are the effects of a global meltdown which will impact on our economy adversely," Deputy Prime Minister Najib Razak said in an interview published in the latest issue of The Edge business weekly.
He said that as a result of the global economic slowdown, Malaysia may have to face businesses "downsizing and retrenchment of workers in the private sector."
"But there is a saving grace - inflation is expected to moderate next year" because of falling fuel prices, he said.
Inflation could be in the region of about 4.0 per cent or less in 2009, according to Najib. Inflation in July and August hit its highest level in nearly three decades at 8.5 percent.
When will our stock market recover?
KH Ooi, investment adviser - THE world’s stock markets, including Malaysia’s, have recovered lately. Some analysts have viewed this recovery as window dressing activities while others have called it bear market rallies. And there are those who wonder whether we have seen the worst.
They are eager to know whether the current stock market level has reflected all the negative news, like the sharp drop in consumer spending, higher unemployment rates or lower sales and lower profits for most of the listed companies in the coming corporate result announcements.
Every investor wants to know when will the market recover.
Some investors may be excited about the current stock market level as a lot of good quality stocks have been hammered down to attractive levels, and are keen to start accumulating them.
However, if the stock market continues to dip for long periods, certain investors may run out of “bullets” to average down their purchasing prices. Then, they will start losing interest in the stock market as they do not have cash to purchase further and their earlier purchases also start to show losses.
We need to prepare ourselves for the market turnaround. However, we need to be patient and wait for the right time to invest. In this article, we will look into the past two major downcycles: the 1998 crash and 2000 crash versus the current 2008 crash.
The Kuala Lumpur Composite Index (KLCI) tumbled by almost 80% in a period of 18 months during the 1998 crash versus a drop of 45% in a period of 13 months during the 2000 crash.
The percentage drop and duration of the 2000 crash were much less severe and shorter compared to the 1998 crash.
For the current 2008 crash, our KLCI has plunged by 47% to its lowest level of 801 points on Oct 28. If investors believe that the current crash is quite similar to the 2000 crash, then we may have seen the worst as the current percentage drop of 47% is near the 2000 crash of 45%.
However, if the 2008 crash mirrors the 1998 crash, then we may have to wait until the KLCI touches about the 300-point level (assuming the same 79.4% drop in the 1998 crash) before we can see any real recovery. Hence, we may have to wait for another nine months or until September 2009 (assuming the same duration of 18 months).
We do not think the 2008 crash is similar to the 1998 crash. Our current economic situation, like central bank reserves, the health of the banking sector as well as economic fundamentals, are much better compared to 1998. However, as mentioned earlier, we need to prepare ourselves for the worst.
What to expect from here on? Our market will try to absorb all the negative news. As long as the market continues to drop as a result of negative news, we know we have not seen the bottom yet. We have to wait for the day when the stock market refuses to come down even when it is loaded with massive negative news; that should be the right time to buy.
Unfortunately, based on our past observations, by then most investors may not have any more cash to purchase or they will still worry about the economic situation. Investors need to understand that stock market cycles are always ahead of economic cycles. Normally, when the stock market hits the bottom, the economic situation is uncertain or is still getting worse.
They are eager to know whether the current stock market level has reflected all the negative news, like the sharp drop in consumer spending, higher unemployment rates or lower sales and lower profits for most of the listed companies in the coming corporate result announcements.
Every investor wants to know when will the market recover.
Some investors may be excited about the current stock market level as a lot of good quality stocks have been hammered down to attractive levels, and are keen to start accumulating them.
However, if the stock market continues to dip for long periods, certain investors may run out of “bullets” to average down their purchasing prices. Then, they will start losing interest in the stock market as they do not have cash to purchase further and their earlier purchases also start to show losses.
We need to prepare ourselves for the market turnaround. However, we need to be patient and wait for the right time to invest. In this article, we will look into the past two major downcycles: the 1998 crash and 2000 crash versus the current 2008 crash.
The Kuala Lumpur Composite Index (KLCI) tumbled by almost 80% in a period of 18 months during the 1998 crash versus a drop of 45% in a period of 13 months during the 2000 crash.
The percentage drop and duration of the 2000 crash were much less severe and shorter compared to the 1998 crash.
For the current 2008 crash, our KLCI has plunged by 47% to its lowest level of 801 points on Oct 28. If investors believe that the current crash is quite similar to the 2000 crash, then we may have seen the worst as the current percentage drop of 47% is near the 2000 crash of 45%.
However, if the 2008 crash mirrors the 1998 crash, then we may have to wait until the KLCI touches about the 300-point level (assuming the same 79.4% drop in the 1998 crash) before we can see any real recovery. Hence, we may have to wait for another nine months or until September 2009 (assuming the same duration of 18 months).
We do not think the 2008 crash is similar to the 1998 crash. Our current economic situation, like central bank reserves, the health of the banking sector as well as economic fundamentals, are much better compared to 1998. However, as mentioned earlier, we need to prepare ourselves for the worst.
What to expect from here on? Our market will try to absorb all the negative news. As long as the market continues to drop as a result of negative news, we know we have not seen the bottom yet. We have to wait for the day when the stock market refuses to come down even when it is loaded with massive negative news; that should be the right time to buy.
Unfortunately, based on our past observations, by then most investors may not have any more cash to purchase or they will still worry about the economic situation. Investors need to understand that stock market cycles are always ahead of economic cycles. Normally, when the stock market hits the bottom, the economic situation is uncertain or is still getting worse.
Companies force workers to take unpaid vacation
NEW YORK (AP) -- Here's the vacation no one wants, courtesy of the recession: Forced time off without pay. Financially struggling universities, factories and even hospitals are requiring employees to take unpaid "furloughs" -- temporary layoffs that amount to one-time pay cuts for workers and a cost savings for employers. This year, the number of temporarily laid off workers hit a 17-year high.
For factory workers, unpaid time is coming in the form of extended shutdowns as manufacturers try to reduce inventory of everything from aluminum to newsprint to fertilizer.
For factory workers, unpaid time is coming in the form of extended shutdowns as manufacturers try to reduce inventory of everything from aluminum to newsprint to fertilizer.
Wall Street gains as GMAC gets financing
NEW YORK (AP) -- Wall Street staged a big advance in the next to last session of 2008 Tuesday after Washington's latest lifeline to the auto industry bolstered hopes that the government will do whatever is necessary to cut short the recession.
Investors found solace in news that General Motors Corp.'s troubled financing arm received $5 billion of financing. The Treasury Department said late Monday it would provide the money to GMAC Financial Services LLC from the $700 billion bank rescue program.
Investors found solace in news that General Motors Corp.'s troubled financing arm received $5 billion of financing. The Treasury Department said late Monday it would provide the money to GMAC Financial Services LLC from the $700 billion bank rescue program.
Monday, December 29, 2008
Wall St. closes out on 2008, year of record losses
NEW YORK (AP) -- Investors are preparing to close out the last three trading days of 2008, a year in which Wall Street has logged its worst performance since Herbert Hoover was president.
The ongoing recession and global economic shock pummeled stocks this year, with the Dow Jones industrial average slumping 36.2 percent. That's the biggest drop since 1931 when the Great Depression sent stocks reeling 40.6 percent.
"It is hard to gauge a recovery because there's so many things out there that are interactive with each other," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York. "Nothing is in a vacuum. Anybody who is managing money has to be on the cautious side for at least the first six months of 2009."
He said many analysts are jumping past this week and focusing on next month, especially with Barack Obama set to be sworn in as president on Jan. 20. There is hope that the new administration will deliver another stimulus package, which along with December's interest rate cuts, might help quell the financial crisis.
The ongoing recession and global economic shock pummeled stocks this year, with the Dow Jones industrial average slumping 36.2 percent. That's the biggest drop since 1931 when the Great Depression sent stocks reeling 40.6 percent.
"It is hard to gauge a recovery because there's so many things out there that are interactive with each other," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York. "Nothing is in a vacuum. Anybody who is managing money has to be on the cautious side for at least the first six months of 2009."
He said many analysts are jumping past this week and focusing on next month, especially with Barack Obama set to be sworn in as president on Jan. 20. There is hope that the new administration will deliver another stimulus package, which along with December's interest rate cuts, might help quell the financial crisis.
Sunday, December 28, 2008
Oil rises 6.7pc as OPEC cuts exports
OIL prices rose in New York after an OPEC member sharply cut exports, raising the prospect of tighter supplies early next year.
OPEC severely curtailing supply is seen as one ingredient for a recovery in oil prices, along with a bottoming out of global demand. The market has seen little sign of the latter, with recent economic indicators ranging from US unemployment claims to Chinese imports pointing to a deepening economic downturn.
A rebound is unlikely to be dramatic, even with the beginnings of an economic turnaround or tighter supplies, forecasters have made clear over the last month.
OPEC severely curtailing supply is seen as one ingredient for a recovery in oil prices, along with a bottoming out of global demand. The market has seen little sign of the latter, with recent economic indicators ranging from US unemployment claims to Chinese imports pointing to a deepening economic downturn.
A rebound is unlikely to be dramatic, even with the beginnings of an economic turnaround or tighter supplies, forecasters have made clear over the last month.
Malaysia Petronas Gas to call bids for new plant-report
KUALA LUMPUR, Dec 27 (Reuters) - Malaysian industrial gas provider Petronas Gas (PGAS.KL) is expected to call bids for a 900 million ringgit ($258.8 million) power plant project in Sabah on Borneo early next year, the Business Times reported on Saturday, citing an unidentified source.
"Tender for the EPC (engineering, procurement and construction) contract will probably be out in March or May," the newspaper quoted the source as saying.
"Tender for the EPC (engineering, procurement and construction) contract will probably be out in March or May," the newspaper quoted the source as saying.
BURSA MALAYSIA:Window-dressing Activities Likely To Boost Mart
KUALA LUMPUR, Dec 27 (Bernama) -- Share prices on Bursa Malaysia are likely to trade higher next week on "window-dressing" activities which are expected to spur the market, dealers said.
December is traditionally a promising month, where one will see "window-dressing" activities, particularly in the index-linked counters, a strategy practised by most fund managers to spruce up their portfolios before presenting them to clients or shareholders for consideration.
December is traditionally a promising month, where one will see "window-dressing" activities, particularly in the index-linked counters, a strategy practised by most fund managers to spruce up their portfolios before presenting them to clients or shareholders for consideration.
Saturday, December 27, 2008
Japan factory output has biggest fall on record
TOKYO (AP) -- Japan's contracting economy got a slew of bad news on Friday when government figures showed that industrial production plunged by its biggest margin on record in November, the jobless rate jumped, and household spending fell.
Many companies, including big names like Toyota Motor Corp. and Sony Corp., have announced plans to cut production and workers. The yen's recent surge has also dealt a huge blow to the world's second-largest economy by eroding exporters' overseas earnings.
Japan's economy is already in recession. In the third quarter, it shrank 1.8 percent at an annual pace, worst that first thought. Economists say that while the outlook for the near-term remains bleak, a modest recovery in demand and production may begin to surface in mid-2009, as governments around the world begin to implement stimulus measures announced in recent months.
"We haven't see the light at the end of the tunnel yet, but we should be seeing it in a few months," said Takuji Okubo, an economist at Merrill Lynch.
Many companies, including big names like Toyota Motor Corp. and Sony Corp., have announced plans to cut production and workers. The yen's recent surge has also dealt a huge blow to the world's second-largest economy by eroding exporters' overseas earnings.
Japan's economy is already in recession. In the third quarter, it shrank 1.8 percent at an annual pace, worst that first thought. Economists say that while the outlook for the near-term remains bleak, a modest recovery in demand and production may begin to surface in mid-2009, as governments around the world begin to implement stimulus measures announced in recent months.
"We haven't see the light at the end of the tunnel yet, but we should be seeing it in a few months," said Takuji Okubo, an economist at Merrill Lynch.
SKorea economy may further slow down in 2009
SEOUL, South Korea (AP) -- South Korea's president said Saturday the country's economy may shrink in the first half of next year due to fallout from the global financial crisis. President Lee Myung-bak said the economy could hit the bottom in the first six months next year but South Korea may attain economic growth for 2009 on an annual basis.
Earlier this month, South Korea's central bank said the country's economy will grow 2 percent in 2009, compared with a revised estimate of 3.7 percent for 2008. South Korea's economy grew 5 percent last year.
The Asia's fourth-largest economy has not contracted on an annual basis since 1997, when it was hit by the Asian financial crisis that forced the government to seek a $58 billion bailout from the International Monetary Fund.
The bank estimated, however, that growth would recover in 2010 to 4 percent.
Earlier this month, South Korea's central bank said the country's economy will grow 2 percent in 2009, compared with a revised estimate of 3.7 percent for 2008. South Korea's economy grew 5 percent last year.
The Asia's fourth-largest economy has not contracted on an annual basis since 1997, when it was hit by the Asian financial crisis that forced the government to seek a $58 billion bailout from the International Monetary Fund.
The bank estimated, however, that growth would recover in 2010 to 4 percent.
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