Malaysia

Malaysia Joins 20 Nations To Set Up AIIB. Malaysia has joined 20 proposed founding member countries to set up Asian Infrastructure Investment Bank (AIIB) with an initial authorised capital of US$50b. One fifth of the initial US$50b will be paidup, the Ministry of Finance said in a statement yesterday. Malaysia and other founding member countries such as China, Singapore, Thailand and the Philippines signed a memorandum of understanding (MoU) for the proposed multi-lateral development bank (MDB) in Beijing, China yesterday. Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah signed the MoU on behalf of the government. Husni said AIIB will focus on financing physical infrastructure projects for economic growth, and will complement existing MDBs such as the Asian Development Bank and the World Bank which are more focused on eradicating poverty. (NST)

Asia

China To Open Up More Sectors To Private Investment To Spur Growth. China's State Council will expand the scope of private investment in key sectors, including telecoms and transport, it said on Friday, as part of measures to support the slowing economy. Premier Li Keqiang chaired a meeting of the council, China's cabinet, which decided that China would "open the door" to more areas for social investment, particularly private capital, a statement on the government's website said. China will "support essential telecommunications enterprises in attracting private strategic investors", the statement added. (Reuters)

China's Property Prices Fall In September. China has said its property prices fell 1.3% in September, marking the first year-on-year fall in the sector. The government measures property prices across its 70 biggest cities. It said new home prices in 69 of those cities had shown month-on-month drops in September, compared to 68 in August. The housing sector accounts for some 15% of China's economy, which grew at its slowest pace in the three months to September since 2009. (BBC)

Indonesia President Appoints Technocrats To Top Economic Posts. Indonesia's new president on Sunday named professional technocrats to lead the top economic ministries and implement much-needed reforms that address costly fuel subsidies, cooling investment and creaky infrastructure in Southeast Asia's biggest economy. President Joko Widodo named a 34-member cabinet in which 18 were seen as technocrats. The rest of the cabinet jobs went to members of the four political parties supporting him, and included the appointment of the daughter of former President Megawati Sukarnoputri to a senior position. Widodo, who was sworn in last Monday, appointed former state-owned enterprises minister Sofyan Djalil as coordinating minister for economics and vice minister Bambang Brodjonegoro, who was promoted to head the finance ministry. (Reuters)

USA

U.S. New Home Sales At Six-Year High; Recovery Still Fragile. Sales of new U.S. single-family homes rose to a six-year high in September, but a sharp downward revision to August's sales pace indicated the housing recovery remains tentative. The Commerce Department said on Friday that sales increased 0.2% to a seasonally adjusted annual rate of 467,000 units, the highest reading since July 2008. August's sales rate was revised down to 466,000 units from 504,000 units. Economists polled by Reuters had forecast new home sales at a 470,000-unit pace last month. (Reuters)

Europe

UK GDP Rises By 0.7% In Third Quarter. UK economic growth slowed in the three months to September, with the economy expanding by 0.7%, the Office for National Statistics said. The figure was weaker than the 0.9% expansion recorded for the second quarter. Economists had correctly predicted that the economy would expand by 0.7% in the July-to-September period. Gross domestic product (GDP) was 3% higher in the three months than the same period in 2013. The third quarter figure will raise concerns that the recovery will fall victim to the slowdown affecting the eurozone. However, the UK still looked set to be the fastestgrowing advanced economy this year. (BBC)

ECB Fails 25 Banks As Italy Fares Worst In Stress Test. Twenty-five lenders including Banca Monte dei Paschi di Siena SpA failed a stress test led by the European Central Bank, which found the biggest capital hole in the region’s banking system in Italy. The Frankfurt-based institution identified a total gap of 25b euros ($32b) as of the end of 2013, most of which has now been raised by banks. Among lenders still in need of funds, Italy’s Monte Paschi and Banca Carige SpA must find a combined 2.9b euros between them, the ECB said today. None of Europe’s largest banks were found lacking. No French, German or Spanish institutions were required to find more capital. Lenders found to be deficient now have as many as nine months to fill gaps identified by the ECB, which is aiming to close the door on half a decade of financial turmoil in the euro region. (Bloomberg)

Euro Zone Risks 'Relapse Into Recession' Without Structural Reforms: Draghi. The ECB's president warned divided euro zone leaders on Friday they risked "a relapse into recession" if they failed to press ahead with structural economic reforms, a message welcomed by German Chancellor Angela Merkel. With a recovery coming to a halt in the second quarter and depressed prices reflecting near record unemployment, France and Italy want to shift away from the spending cuts that marked the bloc's response to the 2009-2012 crisis. But Germany says debt discipline must continue and the European Commission, which acts as a budget policeman, has until next Wednesday to reject 2015 budgets that fail to comply with EU fiscal rules. (Reuters)

MENA

Gulf States Risk Deficit As Oil Price Falls: IMF Head. Oil-dependent Gulf states will face budget shortfalls if the recent decline in oil prices persists, International Monetary Fund chief Christine Lagarde warned Saturday. A sustained decline of $25 a barrel in the oil price would reduce the revenues of most Gulf countries by eight% of gross domestic product, "and put many of them into a fiscal deficit situation," Lagarde told reporters. But the six nations of the Gulf Cooperation Council (GCC) have built up fiscal buffers to cope with the immediate impact of the reduction in revenues, she said after a meeting with regional finance ministers and central bank chiefs. The combined GDP of the GCC last year reached $1.64 trillion, so in this scenario the annual revenue of the six nations could plunge by roughly $130b. (AFP)

Currencies

Dollar Finishes Week Higher Against Yen. The dollar finished the week 1.1% higher against the yen Friday afternoon, benefiting from strong economic data out of the U.S. and Europe. The dollar traded at 108.07 yen Friday afternoon, compared with ¥108.17 Thursday evening. The U.S. Dollar Index a measure of the greenback’s strength against a basket of six currencies, was down 0.1% on the day at 85.7010, but finished the week up 0.6%.The euro traded flat at $1.2668 Friday afternoon, compared with $1.2650 late Thursday. Against the British pound it traded at £0.7876, compared with £0.7890 Thursday. The pound traded flat against the dollar at $1.6087 as data showed U.K. gross domestic product growth slowed in the third quarter. (Market Watch)

Commodities

Brent Oil Ends Week Flat, Pausing Rout, As U.S. Contango Looms. Brent oil prices fell on Friday but were little changed on the week as traders caught their breath from a months-long rout, even as signs of rising global supply and a U.S. contango structure threatened deeper losses. U.S. crude oil futures, meanwhile, continued to slide. Contracts for December delivery settled down $1.08 at $81.01 per barrel, dropping $1.74 since last Friday. Brent crude for December delivery settled at $86.13 per barrel, down 70 cents for the day and 3 cents below last Friday's settlement price, off an intraday low of $85.29 a barrel. (Reuters)

Gold Posts Weekly Loss On Dollar Rise, Strong U.S. Data. Gold edged lower on Friday and closed down for the week as rallying equity markets and strong U.S. economic data dented demand for the precious metal as an insurance against risk. Spot gold was down 0.1% at $1,231.14 an ounce by 2:48 p.m. EDT (1848 GMT). Among other precious metals, silver edged up 0.1% to $17.17 an ounce on Friday. Platinum was down 0.3% to $1,244.60 an ounce, while palladium eased 0.1% to $776.40 an ounce, making it the week's best performer among precious metals with a 4% jump. (Reuters)