US Stocks Decline; Gold, Crude Oil and Copper Falls

U.S. Stocks Decline From Record Highs After Services Data

U.S. stocks fell, after the Standard & Poor’s 500 Index climbed to a record high last week, even as data showed service industries grew at a faster pace in July. The S&P 500 slipped 0.2 percent to 1,706.77 at 10:09 a.m. in New York. The S&P 500 is trading at 15.5 times estimated earnings, compared with an average of 13.9 over the last five years, data compiled by Bloomberg showed.


Gold Bulls Cut Wagers on Signs U.S. Growth Quickens: Commodities

Hedge funds lowered bullish gold bets for the first time in five weeks as signs of accelerating U.S. growth contributed to the longest retreat in prices in a month. Gold futures declined 0.9 percent last week, the first drop since the week ended July 5.

WTI Crude Falls for Second Day After Libya Reopens Port

West Texas Intermediate crude fell for a second day after Libya reopened a terminal closed by protests. Futures dropped as much as 1.2 percent as Libyan officials said the Marsa el Hrega port was operating and all oil fields in Libya’s western region returned to normal. WTI crude for September delivery declined 92 cents, or 0.9 percent, to $106.02 a barrel at 9:40 a.m. on the New York Mercantile Exchange. Libya, holder of Africa’s largest crude reserves, is currently pumping 700,000 barrels a day, which should rise to 800,000 barrels next month.



Copper Falls as Chinese Service Stagnation Fuels Demand Concern

Copper fell in New York after three sessions of gains as a stagnant index of service industries in China stoked concern about the outlook for demand in the world’s largest consumer of the metal. Copper for delivery in September slid 0.6 percent to $3.153 a pound by 7:51 a.m. on the Comex in New York. Copper for delivery in three months fell 0.6 percent to $6,962 a metric ton on the London Metal Exchange. Copper stockpiles monitored by the LME fell for a 14th session to 606,900 tons, daily exchange figures showed. Orders to remove the metal from warehouses rose 2.3 percent, the most since June 27, to 324,300 tons.

Aluminum, zinc and nickel slid in London. Lead and tin rose.

Economies Update 29 Jul 2013 - Gold, Copper, Gas, Crude dropped

Asian stocks fell, with the regional benchmark retreating a fourth day, before a speech by Bank of Japan Governor Haruhiko Kuroda and monetary policy reviews from the U.S. to Europe this week. The yen held gains versus the dollar, while most metals and natural gas declined.

The MSCI Asia Pacific Index of regional equities sank 0.8 percent by 9:57 a.m. in Tokyo, headed for a 2 1/2-week low. The yen climbed 0.2 percent against the dollar, set for the strongest close since June 26 after posting the biggest jump of 16 major currencies tracked by Bloomberg last week. Malaysia’s ringgit weakened a fourth day. Standard & Poor’s 500 Index (SPX) futures were little changed after the gauge rose 0.1 percent July 26. Gold led precious metals lower, while copper dropped 0.3 percent. Natural gas futures (HIA) lost 2.3 percent.

The Federal Open Market Committee convenes July 30-31, with reports this week expected to show economic growth weakened in the second quarter and employers added fewer workers this month. The European Central Bank and Bank of England also meet this week, after both signaled earlier in the month that they will keep interest rates low. Japanese retail sales rose 1.6 percent from a year earlier in June, figures today showed, below the 2.1 percent estimate in a Bloomberg survey.

“It’s a big week with earnings reports, central bank meetings, and of course U.S. payrolls,” Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages more than $130 billion, said by phone. “Investors will be paying a lot of attention to these and studying the implications for Fed tapering arguments. Where markets go from here depends a lot on the data and the Fed.”

Gold dropped 0.3 percent to $1,328.97 an ounce, falling a second day, while silver sank 0.5 percent, platinum lost 0.2 percent and palladium slipped 0.3 percent.

Speculation the Fed will hold back on easing stimulus is fueling wagers betting on a gold rally, with net-long positions up 26 percent as of July 23, U.S. Commodity Futures Trading Commission data show.

Copper for three-month delivery on the London Metal Exchange sank a third day, poised for the lowest close since July 10, as zinc and tin retreated at least 0.2 percent.

West Texas Intermediate crude was unchanged at $104.70 a barrel after slipping 0.8 percent July 26. Oil declined at the end of last week on speculation China’s plans to cut excess manufacturing capacity will reduce fuel consumption.

Gas futures retreated a fourth day. Contracts on rubber maturing in January declined 2.2 percent.

Malaysia 2010 Q1 GDP growth more than 10%

Thursday May 6, 2010
Malaysia's Q1 GDP growth at 10-year high

The country’s economy is likely to register growth of more than 10%
in the first three months of the year
– an achievement not seen in the last 10 years.
The latest economic indicators show a positive trend.

Exports in March grew by 36.4% beating the market forecast of 22.4%.
Imports rose by 45.3% (forecasts were around 30%).

Oil prices fall as hurricane Ida fades, US$ climbs

Published: Wednesday November 11, 2009 MYT 7:44:00 AM
Oil prices fall as hurricane Ida fades, US$ climbs

NEW YORK:
Oil prices fell Tuesday as workers headed back to deep sea platforms that were bypassed by a rapidly weakening storm in the Gulf of Mexico. Ida, once a Category 1 hurricane, was downgraded to a tropical storm Monday and then lost even that status Tuesday as its winds lost their punch. Producers like Royal Dutch Shell and Anadarko reported no damage to facilities and said flights bringing workers back to abandoned platforms and rigs would begin Tuesday.

Benchmark crude for December delivery fell 38 cents to settle at $79.05 a barrel on the New York Mercantile Exchange. Even on Monday, when Tropical Storm Ida posed a potential threat to Gulf platforms, it appeared that the affects of a weakened dollar played a more significant role as oil prices rose $2 to $79.43.

The dollar tumbled so far to start the week, a person holding a euro could trade it in for $1.50, the first time the U.S. currency has been that weak since July. Because crude is traded in dollars, that means an investor could trade in euros for dollars and buy oil for a relative bargain. Even though there are huge supplies of crude right now, the sagging dollar allows investors to buy oil and pay for storate, selling the oil months later when the price is right. On Tuesday, however, the dollar regained ground and crude prices fell.

The response to oil company activity in the Gulf ahead of the storm was muted.
Companies shut down 30 percent of oil production and 27 percent of natural gas production and evacuated about 18 percent of nearly 700 platforms, according to the U.S. Minerals Management Service.

In the past, that would have been enough to send prices soaring by $5 to $10 per barrel.
Last year, U.S. retail gasoline prices spiked when hurricanes Ike and Gustav cut off supply routes, particularly in the Southeast. But Ida was weak compared with those storms and demand for fuel is not much better.

Prices at the pump edged lower overnight, falling 0.6 cents to $2.658 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. The Energy Department late Monday reported that retail gasoline prices fell for the first time in five weeks.

The International Energy Agency lowered its global oil demand forecast as well on Tuesday from 106 million barrels per day to 105 million barrels per day. New technologies that have opened up vast reserves of natural gas will lead to a glut in supply for at least the next several years, the IEA said.

Natural gas for December delivery plunged 4 percent, or 20.3 cents, to settle at $4.467 per 1,000 cubic feet on Nymex. In other Nymex trading, heating oil fell a penny to settle at $2.0523 a gallon. Gasoline for December delivery fell less than a penny to settle at $1.9774 a gallon.
In London, Brent crude for December delivery fell 27 cents to settle at $76.50 on the ICE Futures exchange. - AP
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Weak US$ at 15-month low pushes gold to new high

Published: Tuesday November 10, 2009 MYT 8:01:00
Weak US$ at 15-month low pushes gold to new high

NEW YORK:

Gold prices climbed to another new high Monday as the U.S. dollar sank to a 15-month low.
Gold for December delivery soared as high as US$1,111.70 on the New York Mercantile Exchange before settling at $1,101.40 an ounce, up $5.70, or 0.5 percent.

The gains came as the ICE Futures US dollar index, which measures the dollar against other currencies, dropped more than 1 percent to its lowest level since August 2008. The dollar weakened after finance ministers from the Group of 20 countries pledged over the weekend to maintain their stimulus efforts and keep interest rates low to further a global economic recovery. The G-20 leaders did not address how they might support currencies that have fallen in response to low rates. U.S. rates are near zero, which has contributed to the dollar's decline.
Gold, meanwhile, is seen as a hedge against the weak dollar and inflation, which investors fear could become a problem down the road if the greenback keeps falling.

"Short-term traders are looking at gold as an inverse play on the dollar," said Nicholas Brooks, head of research and investment strategy at ETF Securities in London.

Other commodities that are bought and sold in dollars have benefited from the greenback's slide because foreign investors can buy more with less money.

In other Nymex trading, December silver rose 10.5 cents to $17.48 an ounce, while December platinum rose $19 to $1,364 an ounce.
December copper futures added 1.5 cents to $2.9675 a pound.

In addition to the weaker dollar, jitters over tropical storm Ida helped support higher energy prices Monday. However, forecasters say the storm will likely weaken and bypass most drilling platforms and refineries in the Gulf of Mexico.

Light, sweet crude for December delivery rose $2 to settle at $79.43 a barrel.
Heating oil futures rose 5.92 cents to $2.0627 a gallon and gasoline futures gained 5.75 cents to $1.9818 a gallon.

Grain prices surged on the Chicago Board of Trade.
December wheat futures jumped 22.75 cents to $5.20 a bushel, while corn for December delivery rose 19 cents to $3.86 a bushel.
January soybeans gained 17 cents to $9.72 a bushel.

Prices for cotton, coffee and orange juice also rose.
- AP

26 Oct 09 BNM ~ OPR unchanged at 2.00%

Monetary Policy StatementAt the Monetary Policy Committee (MPC) meeting today, Bank Negara Malaysia decided to leave the Overnight Policy Rate (OPR) unchanged at 2.00 percent.

Since the MPC in August, the international economic and financial conditions have improved further. Economic activity in the advanced economies has shown broader signs of stabilisation, supported by the impact of policy measures implemented and an improvement in consumer sentiment and business confidence.

Several regional economies have reported positive growth in the third quarter, indicating that recovery in the region is ongoing. Notwithstanding these improvements, the outlook for the global economy continues to be uncertain, with recovery likely to be slow and uneven in view of the ongoing adjustments.

In the domestic economy, stronger evidence has emerged to suggest that conditions are improving and a recovery in economic activity is gaining some strength. These improvements are more broad-based and are reflected in stronger labour market conditions, consumer and business sentiments, industrial production, financing activity and external trade. These positive developments are expected to continue into 2010, with growth in the domestic economy expected to continue to be supported by existing policy measures and the growing confidence in the private sector.

Consumer prices declined at a slower rate in September. The decline in prices largely reflects the cumulative fall in fuel prices since June 2008 and the easing pressure on food prices. The decline in consumer prices, however, is expected to be temporary.

Excluding further unanticipated price adjustments and external influences, inflation in 2010 is projected to be positive but remain subdued.With improving domestic economic conditions, and as price pressures and inflationary expectations are expected to remain contained going forward, the assessment is that the current monetary policy stance is appropriate and will continue to provide support to economic activity.

Bank Negara Malaysia28 October 2009

Zeti: Domestic demand shows signs of economic recovery

Central bank governor sees better external demand in third quarter

KUALA LUMPUR:
The country’s domestic demand is showing clear signs of recovery from the fiscal stimulus and an accommodative monetary policy, says Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz. “We have seen the worst,” she told reporters after delivering a keynote address at the 5th Banking and Financial Law School 2009 conference yesterday.

Zeti expects an improvement in external demand in the third quarter and an expansion in gross domestic product (GDP) in the next three months. “We expect growth to be modest at the initial stage and improve more significantly next year,” she said, adding that there would be a revision in the country’s growth forecast in Budget 2010, to be tabled in parliament next month.

The Government expects the economy to shrink as much as 5% in 2009. The country’s economic contraction eased to 3.9% in the second quarter from a 6.2% decline in the first quarter.

Zeti said interest rates were also “appropriate” as government stimulus and improving overseas demand had helped boost economic recovery. The current interest rate level was supporting the demand for access to financing, she added. Bank Negara has cut its key rate from 3.5% in mid-November to 2% to spur growth.

RAM Holdings Bhd chief economist Dr Yeah Kim Leng said the economic recovery momentum had been rising since the first quarter. “The pace of recovery should be sustainable based on the economic indicators we have seen so far, with steady improvements in industrial production index and exports, especially in the second quarter,” he said. Yeah expects the country’s export level to turn positive in December and GDP to achieve positive growth in the fourth quarter. RAM’s GDP forecast is a contraction of 3.3% this year.

AmResearch Sdn Bhd senior economist Manokaran Mottain believes the country’s economy is currently in a recovery phase, backed by an upturn in global trade. “We are maintaining our GDP growth forecast of minus 3% this year, with a growth of 1% to 2% in the fourth quarter. Our GDP growth forecast in 2010 is 3% to 4%. “The Government’s stimulus package would be disbursed and help boost the economy into 2010,” he said.

On interest rates, he expects a review only upon a firmer recovery in the domestic economy.
“If economic growth is modest, then a revision in interest rates will only happen in the second half of 2010. It may even be flat for the whole year,” he said.

Yeah foresees interest rates remaining at 2% for the rest of the year, as any increase may derail economic recovery.

The central bank has kept interest rates unchanged for a fourth straight meeting last month.

On whether the country was experiencing a W-shaped recovery, Zeti said there was no credit crunch as financial institutions remained strong and continued to provide financing for domestic businesses. Only over-leveraged countries needed to reduce their indebtness, she said, adding: “Only if they restructure their financial system would they be able to see any sign of increase in consumption activity. “There could be a second round of impact on their financial system given the economic slowdown but, in Malaysia’s case, we never had that situation to begin with and our banks are financially very solid.”
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BNM Reserves ~ 15 Sep 09 : RM 329.9 b

The international reserves of Bank Negara Malaysia amounted to RM329.9 billion (equivalent to USD93.5 billion) as at 15 September 2009.

The reserves position is sufficient to finance 9.4 months of retained imports and is 3.8 times the short-term external debt.
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Thumbs-up for ‘Najibnomics’

KUALA LUMPUR: Prime Minister Datuk Seri Najib Tun Razak has covered good ground since taking office on April 3 with a number of positive policies and actions.

They include liberalising the New Economic Policy, ensuring greater transparency, speeding up the award of government infrastructure pro-jects and improving ties with Singa-pore to draw more foreign direct investments into Iskandar Malaysia, a development region in Johor twice the size of Singapore.

Aimed at stimulating the local economy, attracting foreign investments and foreign talent, reducing bureaucracy, tackling crime and corruption, effecting greater accountability and promoting national unity (through the 1Malaysia concept), Najib’s policies have been impressive.

CLSA Asia-Pacific Markets, an independent brokerage and investment group headquartered in Hong Kong, described Najib’s positive economic and social reforms as “Najibnomics”, given his economics background.

With his background on industrial economics from the University of Nottingham, CLSA said Najib had been quick to effect various fiscal, government and structural reforms.
In its special strategy report on Malaysia, CLSA said: “Although he has until March 2013 to call for the next general election, we believe he has little choice but to work quickly as the clock is fast ticking.

“Najib not only has to implement new policies to reform the government and turn around the economy simultaneously, he has to deliver some decent results to ensure that the ruling Barisan Nasional coalition performs better than in the last general election in March 2008.”
On the economic front, CLSA said it expected the Malaysian economy to recover in 2010 while consumer sentiment was also improving.

In view of Malaysia’s high savings rate at 43.3% of the GDP which would support private consumption while the impact of weak imports from Western countries would not be too severe, it pointed to an economic recovery next year.

Malaysia’s 2009 GDP has been forecast to decline by 4 to 5% this year compared to a growth of 4.5% last year.

CLSA’s expectations are in line with that of Bank Negara Malaysia, which indicated that the country’s growth outlook for the second half of 2009 was expected to improve after the economy contracted at a slower rate of 3.9% in the second quarter of 2009 following a 6.2% contraction in the first quarter of the year.

The central bank said there were increasing signs that conditions in the global economy were stabilising as the pace of the decline in economic activity was moderating in advanced countries.
CLSA said that its recent contacts with Malaysian companies revealed that most were cautiously optimistic and were coping fairly well with the economic downturn.

“There has not been any high-profile debt default while non-performing loans in the banking system remain benign. Companies have merely been hit by shrinking revenues, thinning margins and higher receivables, while corporate governance issues have been sporadic.
“Most companies believe that the worst is over. Having said that, they do think the way forward will remain challenging as unemployment continues to creep up,” CLSA said.

The investment group also conducted a survey among 300 respondents, two-thirds of them from Kuala Lum-pur, and ascertained that Malay-sians were coping well with the downturn, with only 22% of them saying that their employment had been affected.
In terms of household income, 44% said they experienced a decline in income while 10% experienced an increase.
About 70% said they had changed their spending patterns, reducing expenditure on food, clothing as well as leisure.

Essentials like mortgages, utilities, transport, children’s education, healthcare and communications have been largely unaffected by the downturn.

CLSA said these simple surveys and feedback from companies and consumers seemed to tie in with the findings of the Malaysian Institute of Economic Research. — Bernama
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US Treasury Secretary: Confidence has returned to markets

WASHINGTON: Citing emerging financial sector stability, Treasury Secretary Timothy Geithner said Thursday that a number of government rescue efforts in place since the Wall Street crisis are no longer needed and that banks will repay US$50 billion in rescue funds over the next 18 months.

Geithner, testifying before a congressional watchdog panel, said the nation still has a ways to go before "true recovery takes hold."

But he said improved conditions in the banking industry have prompted Treasury to begin winding down emergency support programs implemented after the collapse of Lehman Brothers last year.

"The financial system is showing very important signs of repair," Geithner said.
"I would not want anyone to be left with the impression that we're not still facing really substantial enormous challenges throughout the US financial system."

The cautious but upbeat tone reflects a growing push by the administration to present the government financial rescue efforts as a success amid lingering public apprehension about the economy.

Geithner was testifying before the Congressional Oversight Panel that monitors Treasury's $700 billion financial bailout that President George W. Bush and President Barack Obama used to shore up not only banks but the auto industry as well.

Banks have already paid back $70 billion of the $250 billion that the government injected over the past year to boost their liquidity.
Geithner noted that only $11 billion of that infusion has occurred since he became Treasury secretary earlier this year.
He said dividends on those infusions and the repurchase by banks of warrants held by the government has also generated $12 billion for the government.
Overall, he said, the government realized a 17 percent return from 23 banks that have paid back the government in full.

Geithner said a major Treasury program that had been used to guarantee up to $3 trillion in money market mutual fund assets would be closed down on schedule on Sept. 18.
The program had no direct cost to taxpayers and actually earned more than $1 billion in fees paid by the mutual fund industry.
That program was established at the height of the financial crisis a year ago after a large money market fund called the Reserve Primary Fund "broke the buck" - meaning the value of its underlying assets fell below $1 for each investor dollar put in.

Geithner said a series of emergency program initiated by the Federal Deposit Insurance Corp. and the Federal Reserve have also begun to phase out.
Still, unemployment stands at 9.7 percent and administration officials say it could rise to 10 percent in the coming months.
Foreclosure rates are surging and the mortgage market remains tight. Geithner acknowledged that the economy would still face "more than the usual ups and downs."
"The classic mistake people make is they declare victory too soon," he said.

The government's bailouts have not been popular with the public and Geithner's testimony emphasized the positive returns from the various measures
Still, one protester sitting behind Geithner held up a pink sign asking: "Where did the $ go?"

Elizabeth Warren, the oversight panel's chairwoman, said: "Taxpayers still want to know how their money has been used and what difference their enormous investment has made."
When Warren pointed out that bank failures are reducing the number of financial institutions, Geithner replied: "Fewer every day, but that's sort of the necessary process of repair and restructuring that we're going through."

The panel has been critical of government steps, arguing that in the past it has not received full value for repaid infusions of money into financial institutions.
More recently, the panel contended that a significant portion of the government assistance to the auto industry will likely not be repaid.
Geithner pointed out that the number of large financial institutions has grown smaller since the economic crisis.

But Warren cautioned that some of the remaining firms were larger than before. "Are we more at risk on the question of concentration than we were a year ago?" she asked.
"I don't think so," Geithner replied.
"But it depends largely on what Congress ultimately decides in terms of financial reforms."
The administration has called for a series of regulatory changes, including requiring large, intertwined institutions to have access to more money to cover their risks.
- AP
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Bank of China’s Zhu Sees ‘Bubbles’ in Asset Markets

Sept. 10 (Bloomberg) -- Bank of China Ltd., which led the nation’s $1.1 trillion lending spree in the first half, said ample liquidity has caused “bubbles” in stocks, commodities and real estate.
“The potential risk is that a lot of liquidity goes to the asset market,” Vice President Zhu Min said in an interview in Dalian today. “So you see asset bubbles in commodities, stocks and real estate, not only in China, but everywhere.”

China’s record credit expansion, which helped the country’s economy expand 7.9 percent in the second quarter, has raised concerns that bank loans have been diverted and used to buy stocks and real estate, fueling unsustainable gains in equity and property markets.

The Shanghai Stock Exchange Composite Index has gained 61 percent this year, compared with a 20 percent increase in the MSCI World Index of 1,659 companies. House prices China’s 70 biggest cities rose at the fastest pace in 11 months on record lending and climbing confidence, according to a National Bureau of Statistics report today.

Bank of China advanced 1 trillion yuan of new loans in the first six months, more than any other Chinese lender and the gross domestic product of New Zealand. The Beijing-based bank, the nation’s third-largest, said last month it plans to slow credit growth in the rest of the year and improve loan quality.

Higher Capital Requirements

China Construction Bank Corp., the nation’s second-largest, said last month it will cut new lending by 70 percent in the second half from six months earlier to avoid a surge in bad debt. Chairman Guo Shuqing said excess cash in the banking system has led to asset bubbles.
An estimated 1.16 trillion yuan ($170 billion) of loans were invested in stocks in the first five months of this year, China Business news reported June 29, citing Wei Jianing, a deputy director at the Development and Research Center under the State Council.

The China Banking Regulatory Commission said on Sept. 3 it will implement stricter capital requirements for banks. Lenders were also required to raise reserves to 150 percent of their non-performing loans by the end of this year, up from 134.8 percent at the end of June.
The Shanghai Composite Index fell into so-called bear market last month on concern slowing lending growth and tighter capital requirements would derail a recovery in the world’s third-biggest economy. The gauge has bounced back this month, rising 9 percent.

New loans in July were less than a quarter of June’s level. August new-lending figures are scheduled to be released on Sept. 11 and may show a 10 percent decline to 320 billion yuan, according to the median estimate of nine analysts surveyed by Bloomberg.

Loans surged in the first six months of this year after the central bank scrapped quotas limiting lending in November to support the government’s 4 trillion yuan stimulus package and key industries including petrochemicals, steel and automakers.

Zhang Xiaoqiang, vice chairman of National Development and Reform Commission, China’s top economic planning agency, said he sees “little bubbles” in the nation’s new energy sector and is looking into measure to curb excesses at an early stage to allow for healthy development for the industry.
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Malaysia IPI : July ~ 104.8 points

July IPI down 8.4% on-yr, up 7.1% on-mo

1.PERFORMANCE OF INDUSTRIAL PRODUCTION INDEX

Index July 2009
Industrial Production Index : 104.8
Mining index : 99.6
Manufacturing Index : 106.2
Electricity Index : 118.7

The Industrial Production Index (IPI) in July 2009 decreased 8.4% as compared with July 2008, follows a 9.5% (revised) year-on-year decline in June 2009. The drop in July 2009 was due to the decreases in the two indices: Manufacturing (12.0%) and Mining (1.9%). However, the index of Electricity posted an increase of 3.1%.

Month-on-month, the IPI increased 7.1%. The cumulative index for the period of January-July 2009 declined 12.0% as against the same period in 2008.

2. PERFORMANCE OF MANUFACTURING SECTOR

The Manufacturing output in July 2009 dropped 12.0% as against July 2008.
Output for June 2009 went down by 13.0% (revised) as compared with the same month of 2008.
As compared with the preceding month, the output for July 2009 increased 6.2%.
The growth for the first seven months of 2009 was lower by 16.1% as compared with the same period of last year.
The contraction of the Manufacturing output was due to decreases in the groups, Electrical and Electronics Products (26.2%); Wood Products, Furniture, Paper products, Printing (16.9%); and
Non-metallic Mineral Products, Basic Metal and Fabricated Metal Products (11.7%).

3. PERFORMANCE OF MINING SECTOR

The output for the Mining sector fell 1.9% in July 2009 as compared with the same month of 2008.
This was due to the decreases in crude oil index (5.5%).
However, the natural gas index increased to 8.2%.
As compared with the preceding month, the Mining output increased to 10.0%.
For the first seven months of 2009, the Mining sector recorded a decline of 3.9% as compared with the same period a year ago.

4. PERFORMANCE OF ELECTRICITY SECTOR

The Electricity output increased 3.1% in July 2009 as compared with the same month a year earlier.
As compared with the preceding month, the Electricity output posted an increase of 3.5%.
A decrease of 3.7% was registered in the period of January-July 2009 as compared with the corresponding period of 2008.

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Japan Core Machinary Order : July~Yen 664.7 b

Sep 9, 8:23 PM EDT
Japan July core machinery orders down 9.3 percent

TOKYO (AP) -- Japan's core machinery orders, a closely watched indicator of corporate capital spending, fell back in July after a rise in the previous month, the government said Thursday.

Core private sector machinery orders in July plunged 9.3 percent from a month earlier to 664.7 billion yen ($7.3 billion), according to the Cabinet Office report. The figure excludes often-volatile orders from shipbuilders and electric power companies.

Declines in orders at steelmakers and transport equipment companies contributed to the fall.

The result marked a major downturn from a 9.7 percent jump recorded in June - the first increase in four months - and was a bigger decline than the 3.6 percent fall forecast in a Kyodo news agency market survey.

In the April-June quarter, core machinery orders fell 4.9 percent from the previous quarter. The government expects the figure to tumble 8.6 percent in the July-September period.

© 2009 The Associated Press.
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OPEC : Press Release ~ No cut in Oil Production

The Conference reviewed current oil market conditions and future prospects and observed that, whilst there are signs that economic recovery is underway, there remains great concern about the magnitude and pace of this recovery, especially in the major industrialized nations of the OECD. There has been some easing of the overhang in crude oil stocks but market fundamentals remain weak, refinery utilization rates are low and product inventories have risen considerably.

Accordingly, since the market remains over-supplied and given the downside risks associated with the extremely fragile recovery, the Conference once again agreed to leave current production levels unchanged for the time being. In doing so, the Conference reiterated its determination to ensure sound supply fundamentals and an adequate level of spare capacity for the benefit of the world at large.

Similarly, the Conference recorded the readiness of Member Countries to rapidly respond to any developments which might jeopardize oil market stability and their interests. Therefore, in addition to continuing to maintain constant watch over supply/demand fundamentals, the Conference agreed to reassess the market situation at its 155th (Extraordinary) Meeting, to be held in Luanda, Angola, on 22nd December 2009.

Aviation Industry may be bottoming out

Wednesday September 9, 2009
Industry recession may be bottoming out, say aviation players


HONG KONG/BRUSSELS: Airlines and their suppliers are reporting tentative signs that a severe industry recession is bottoming out. Airbus, the world’s largest producer of passenger jets, said airline traffic had possibly seen “the trough of the recession” and could start to rebound from next year. “In 2009, we believe total traffic is down 2%. In 2010 we may experience a 4.6% growth rate,” Laurent Rouaud, senior vice president of market and product strategy, said at the Asian Aerospace exhibition in Hong Kong.

In Europe, Air France-KLM said passenger traffic fell 2.9% in August but its planes were on average 84.8% full, a rise of 1.1 percentage points from the same holiday peak month a year ago. The figures came as industry data for July showed airline passenger and freight traffic dropped much less sharply year-on-year than in the first half of 2009. Industry body ACI Europe said after a survey of 106 airports, passenger traffic at European airports fell 4.3% compared with July 2008, versus an average 9.6% drop during the preceding six months of this year.

Freight traffic – a widely watched indicator of economic health – fell 13.4% compared with July 2008, an improvement on the average 22.4% decrease during the preceding six months.
“That would fit with our picture,” said economist Cristoph Weil at Commerzbank.
“We believe we will see a strong recovery in Q3 and Q4 in the euro area.”
Air France-KLM said its cargo business had in August confirmed signs of stabilisation seen in recent months.

Ireland’s Aer Lingus said on Monday passenger numbers had risen 7.7% year-on-year in August. Economists say the global economy looks to be pulling out of recession, with the OECD predicting a renewal of growth for the United States and euro zone in the third quarter.

But, like the airline industry, the broader economy remains on life support and G20 finance ministers agreed on Sept 5 to keep stimulus measures in place. ACI Europe’s numbers were helped slightly by weak comparative figures in July 2008, when the economic downturn first started to bite and passenger data entered negative territory for the first time in six years.

But weak comparatives account for only about a fifth of the improvement in freight volumes, ACI archive figures show. Still, Airbus and Boeing are headed for their worst annual order tally in at least 15 years as struggling airlines cancel or defer almost as many planes as they buy.
The world’s airlines are expected to post total 2009 losses of US$9bil, with first-half net losses reaching at least US$6bil, according to the International Air Transport Association.
Air France-KLM last week announced 1,500 voluntary redundancies, adding to thousands of airline job cuts worldwide.

Rouaud however said Airbus was on track to deliver 480 aircraft in 2009 and aircraft financing has been “so far, so good.” Deliveries lag orders by several years but airlines only have to pay for aircraft when they are delivered. The EADS subsidiary is projecting 2009 plane deliveries at least as high as last year’s record 483 aircraft, but has said it will extend recent production cuts if conditions worsen.

Even if airlines start to fly out of recession, they will be haunted by big questions on costs, especially fuel, Rouaud said. At US$67.90 a barrel, benchmark North Sea Brent crude futures prices have risen 38% since the end of March. — Reuters

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Oil Price ~ 08 Sep 09 : US 68

Published: Tuesday September 8, 2009 MYT 2:54:17 PM
Oil near US$68 in Asia Tuesday

Oil prices hovered near US$68 a barrel Tuesday in Asia for a fifth day as the U.S. summer driving season wound down and OPEC planned to meet Wednesday.
Benchmark crude for October delivery was up 35 cents at $68.37 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.

Trading was closed Monday in the U.S. for the Labor Day holiday, so the contract last settled on Friday at $68.02 after rising 6 cents. Labor Day is traditionally seen in the U.S. as the end of summer, and demand usually falls in the autumn before rebounding in the winter as heating oil consumption picks up.

"The seasonal demand is really coming to an end right now," said Jonathan Kornafel, Asia director for market maker Hudson Capital Energy in Singapore. "It looks as if the bearish pressures are going to win out."

Leaders of the Organization of Petroleum Exporting Countries have signaled they plan to keep output levels unchanged at the group's meeting Wednesday in Vienna. That could send oil prices lower as traders eye OPEC members producing more and more over official quotas.

"Compliance levels have been dropping every month because many of the members have been cheating," Kornafel said. "So if they don't cut quotas, more oil will be entering the market."

In other Nymex trading, gasoline for October delivery fell 0.63 cent to $1.77 a gallon, and heating oil rose 0.98 cent to $1.73 a gallon. Natural gas dropped 6.8 cents to $2.66 per 1,000 cubic feet.

In London, Brent crude was up 46 cents to $66.99.
- AP
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Japan Trade ~ July : surplus $13.6 b

Published: Tuesday September 8, 2009 MYT 8:15:00 AM
Japan's said Tuesday current account surplus down 19.4%

Japan's finance ministry says the country's current account surplus in July fell 19.4 percent from a year earlier.
The current accounts surplus is Japan's broadest measure of trade with the rest of the world.

The ministry said Tuesday that the surplus in July came at 1.27 trillion yen ($13.6 billion).

Exports in July tumbled 37.6 percent to 4.55 trillion yen, marking the 10th consecutive year-on-year decline.
Imports plunged 41.2 percent to 4.11 trillion yen in the month.
- AP
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July Export Value Highest in first 7 months

Tuesday September 8, 2009
July export value highest in first seven months this year
By LEE KIAN SEONG

Malaysia’s exports in July fell 22.8% to RM48.87bil while imports declined 16% to RM41.06bil compared with the same month last year.
The total trade registered a decline of 19.9% to RM89.92bil from RM112.2bil in July 2008.
A trade surplus of RM7.81bil was recorded in July, compared with RM14.41bil last year.

Month-on-month, exports were up RM3.79bil or 8.4% in July versus June.
“This was the highest monthly export value recorded in the first seven months this year,” the International Trade and Industry Ministry said in a statement yesterday.

Compared to June, imports were 14.2% higher in July. Imports decreased 16% in July from a year earlier “mainly due to the decline in imports of intermediate goods,” the ministry said.
Imports of intermediate, capital and consumption goods accounted for 68.7%, 14.8% and 7.2% of total imports respectively in July.
The ministry said the total trade in the first seven months was valued at RM531.68bil, down 23.9% against the previous corresponding period.

Manufactured exports in July increased 11% compared with June.
“This was mainly due to higher exports of electrical and electronic (E&E) products, chemicals and chemical products, iron and steel products as well as optical and scientific equipment,” the ministry said.

It said E&E products formed the bulk of exports in July, accounting for 42.2% or RM20.63bil of the total, followed by palm oil (7.3%) and chemicals and chemical products (6.1%).

“Singapore, China, the US, Japan and Hong Kong, which accounted for 52.3% of total exports, were the top five export destinations for Malaysia,” it said.
Exports to Asean rose 6% to RM12.86bil versus June, and accounted for 26.3% of total exports in July.

RAM Holding Bhd chief economist Dr Yeah Kim Leng said the trade figures were within market expectations and the month-on-month growth showed improving demand in the market.
“This is the trend experienced by other countries in the region as well,” he told StarBiz, adding that the pace of contraction was expected to ease further.
He said the market was expected to improve going forward given the rise in the developed economy and the improving confidence level in the market.

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Palm Oil Posts Biggest Weekly Drop in Seven Months on Soybeans

September 5, 2009 9:02 UTC+8

Palm Oil Posts Biggest Weekly Drop in Seven Months on Soybeans

Palm oil posted the biggest weekly decline in seven months on concern a record U.S. soybean harvest will push soybean oil prices lower, encouraging substitution.

The U.S., the world’s largest soybean grower and exporter, may harvest as much as 3.372 billion bushels in the marketing year that began Sept. 1, Informa Economics Inc. said yesterday. That compares with a government estimate of 3.199 billion bushels and FCStone Group Inc.’s forecast of 3.266 billion.

“Palm oil prices have been dragged down” by reports of the record harvest, Ivy Ng, an analyst at CIMB Securities in Kuala Lumpur, said by phone. “There’s been some short-term news flow that’s not favoring a further uptrend in prices.”

November-delivery palm oil dropped 1 percent to 2,197 ringgit ($623) a metric ton on the Malaysia Derivatives Exchange, completing a decline of 7.3 percent this week, the biggest since the week ended Feb. 20.

Palm oil and soybean oil, the world’s two most-consumed edible oils, are used in food and bio-fuel production.

Soybean oil for December delivery gained 0.2 percent to 34.72 cents a pound in after-hours electronic trading on the Chicago Board of Trade at 6:09 p.m. Singapore time. The futures, down 5.4 percent this week, were headed for the biggest tumble since the week ended July 10.

Inventory Outlook

Palm oil exports from Malaysia, the world’s second-biggest producer, fell 7.9 percent to 1.298 million tons in August from a month earlier, according to data tracked by Societe Generale de Surveillance and released Sept. 1.

Intertek, another independent surveyor, said Sept. 1 it tracked shipments of 1.33 million tons of palm oil from Malaysia, down 4.9 percent from a month earlier.

Falling exports may lift stockpiles, analysts say. Official August data will be released by the Malaysian Palm Oil Board next week.

Palm oil stockpiles in Malaysia, the world’s second-biggest producer, dropped in July for the first time in three months to 1.33 million tons on an export surge, the board’s data showed.

“Any correction in crude palm oil prices from here is likely to be limited,” supported by “a likely month-on-month pick-up in August 2009 crude palm oil inventory levels for Malaysia,” according to a report by JPMorgan Securitites (Malaysia) led by Simone Yeoh, a plantation analyst in Kuala Lumpur.

She forecasts inventory rising to more than 1.4 million tons, which will still be 20 percent below the same month last year. She maintained her average forecast of 2,450 ringgit in the second half of this year.

US Crude Oil Inventories (29 Aug 09) dropped slightly

WASHINGTON, Sept. 2 (UPI)

U.S. crude oil inventories dropped by 0.4 million barrels in the week ending Aug. 28, the U.S. Energy Information Administration said Wednesday.

Crude inventories fell from 343.8 million barrels to 343.4 million barrels during the week but remain above the upper boundary of the average range for this week of the year, EIA said.

Gasoline inventories declined by 3 million barrels to 205.1 million barrels, but remain in the upper half of the average range.

Supplies of distillate fuels, which includes heating oil, rose by 1.2 million barrels to 163.6 million barrels.

Finished gasoline inventories and stocks of gasoline blending components both fell during the week, EIA reported.

At 9.2 million barrels a day, demand for gasoline over the past four weeks is 0.5 percent higher than demand during the same period a year ago.

Distillate fuel demand has dropped 7.3 percent in the past four weeks compared to a year ago.

Jet fuel demand is also down, off 12.1 percent from a year ago, the report said.

© 2009 United Press International, Inc. All Rights Reserved.
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