RM2.58 Billion in GST from Imports in Under Two Months. The Royal Malaysian Customs Department has collected RM2.58 billion in Goods and Services Tax (GST) from imports since implementation of the new tax system on April 1. Deputy Finance Minister Datuk Chua Tee Yong said the figure, however, is not the exact amount in government revenue, as a bulk of it would be used as GST input credit. He was speaking to reporters yesterday after launching the Post-GST Conference 2015. On GST filing, he said the Customs Department would be organising a nationwide client programme to help businesses do so, especially those who are filing for the first time. (Bernama)
Credit Growth Remains Strong, Says Zeti. Credit growth in Malaysia remains strong, expanding at the rate of nine per cent, Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz said. "Therefore, we believe there continues to be access to financing," she said when asked on the Small and Medium Enterprises (SMEs) concern on access to funding. Banks should highlight how SMEs could be eligible for funding and not just reject them, she told reporters after giving a luncheon address at the ASEAN SME Conference here on Wednesday. On the inflation rate of 1.8% posted in April, Zeti said it was within the central bank's projection. "Inflation will be in the region of 2% for the year and we believe that this is well within what we had anticipated," she said. (Bernama)
Moody's: Malaysia to Maintain Current Account Surplus. Malaysia is expected to maintain a current account surplus for the next two to three years, mainly supported by exports, Moody's Investors Service said. Its vice-president and senior analyst for sovereign risk group, Christian de Guzman said recent regional export data showed that Malaysia's manufacturing exports, especially electronics had picked up. “That could possibly be due to the competitiveness with the Malaysian ringgit, having depreciated considerably over the past year," he told a press conference on the 'Malaysia Sovereign Credit Outlook' yesterday. (Bernama)
China April Industrial Profits Reverse Six-Month Falling Trend. Chinese industrial sector profits posted their first annual rise since last September, in a sign that margin pressures may be easing at some for firms, particularly in the price sensitive energy sector. Industrial sector profits in April rose 2.6% from a year earlier, National Bureau of Statistics data showed on Wednesday, but were down 1.3% for the year to date, reflecting the extreme weakness of growth in the first quarter. The statistics bureau said recent interest rate and fee cuts were boosting industrial profits, but that companies still faced weak demand and falling prices. (Reuters)
Japan Government Ups View on Consumer Spending. Japan's government raised its assessment of consumer spending for the first time in 10 months in May but kept its overall view of the economy unchanged. It also cut its view on exports and factory output in its monthly report, worrying signs as the economic recovery struggles to gain momentum after last year's recession. The government's new economic report came after the Bank of Japan last week offered a slightly more upbeat view of the economy and its governor Haruhiko Kuroda shrugged off the need for more monetary stimulus. "The economy continues a moderate recovery trend," the Cabinet Office said in the report. (Reuters)
People’s Bank of China Warns of Unstable Inflation Outlook, Low Prices. China's central bank warned of deflationary pressure in the world's second-largest economy on Wednesday as it forecast subdued consumer prices for the year and a challenging growth outlook. But the PBOC also tried to allay concerns about China's stuttering economy, saying it can expand around 7% this year, in line with the government's economic growth target. In its 2014 annual report, the PBOC reiterated that it would keep monetary policy prudent, and would make timely adjustments - or "fine-tuning" - to ensure conditions are "appropriate". "Price expectations are not very stable, and the price level is expected to remain volatile at a low level," the PBOC wrote. (Reuters)
Indonesia Plans to Raise Threshold at which Personal Income Tax is Due. Indonesia's finance minister said on Wednesday the government plans to raise by nearly 50% the income threshold at which individuals start to owe income tax, in a bid to boost purchasing power and economic growth. Bambang Brodjonegoro told a parliamentary committee he is considering increasing the threshold for an unmarried adult to 36 million rupiah ($2,728) a year from the current 24.3 million rupiah. He did not say what changes might be made for married couples or individuals with dependents. Lifting the income level at which tax starts to be due "will increase people's purchasing power although this could disrupt (state) revenue," Brodjonegoro said. (Reuters)
Solid U.S. Business Spending Plans Offer Ray of Hope for Factories. A gauge of U.S. business investment spending plans increased solidly for a second straight month in April, a hopeful sign for manufacturing activity after a long spell of weakness. The overall economy is gradually firming, with other reports on Tuesday showing consumer confidence perking up this month and house prices extending gains in March, which should boost household equity and support consumer spending. The Commerce Department said non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rose 1.0% last month after an upwardly revised 1.5% increase in March. The so-called core capital goods orders were previously reported to have increased 0.6% in March. (Reuters)
Bernanke Sees No Extreme Moves in US Markets, Asset Prices. Former Federal Reserve Chairman Ben Bernanke said that China's economic slowdown should not worry markets as there was no risk of a hard landing, and emphasized that a move to raise U.S. rates should be viewed as a positive sign for the world's largest economy. Bernanke, who participated in an open interview at a private-sector forum in Seoul on Wednesday, said the expected U.S. rate hike would be "anticlimactic" when it happens and that there would only be minor negative impact on South Korea. "There may be some volatility. Countries like Korea are very well placed because it has very good policy, good institutions. It is not weak or underdeveloped and doesn't know how to handle capital flows." (Reuters)
German Consumer Morale Brightens Further Heading into June. Morale among German consumers improved heading into June, helped by a growing willingness to make purchases, a survey showed on Wednesday. The GfK consumer sentiment indicator, based on a survey of 2,000 Germans, edged up to 10.2 from 10.1 a month earlier. This was the highest level since 11.0 in October 2001 and beat the consensus forecast for 10.0. Private consumption has eclipsed exports as Germany's main engine of growth with record-low unemployment, bumper wage deals and ultra-low interest rates making consumers more willing to open their purse strings. (Reuters)
Greece Says Deal Close but Schaeuble Quashes Optimism. Greece's cash-strapped government insisted Wednesday it was "very close" to reaching a vital deal with bailout lenders, but the optimism in Athens was swiftly shot down by German Finance Minister Wolfgang Schaeuble. Greece's four-month-old government is days away from loan repayments to the International Monetary Fund it says it may not be able to honor. Prime Minister Alexis Tsipras paid a rare visit to the Finance Ministry to announce that a breakthrough was in sight. "We have taken very many steps. We are in the home stretch, close to the final agreement," he told reporters. (AP)
Dollar Hits Eight-Year High vs. Yen, Euro Edges Up. The dollar rose against most major currencies on Wednesday, hitting an eight-year peak against the yen on expectations the Federal Reserve would raise interest rates later this year on signs the U.S. economy is recovering from an anemic first quarter. The euro recovered from a one-month low versus the greenback following reports that Greece and its creditors had made progress toward a deal that would avert a default. The dollar's gains were also fed by automatic sell orders for the yen, which had traded in a relatively tight range versus the greenback, traders said. Against the yen, the dollar touched an eight-year high of 123.875 yen on the EBS trading system. It last traded up 0.6% at 123.840 yen, bringing its year-to-date gain to 3.5%. The euro was last up 0.2% at $1.08925 after touching a one-month low of $1.0819 earlier. Renewed enthusiasm in the greenback boosted the dollar index to 97.775, its highest level in more than a month. It was last up 0.1% at 97.371. (Reuters)
Oil Down about 3% Again on Dollar, Awaits Supply Data. Oil prices fell by up to 3% for a second straight day on Wednesday as a resurgent dollar weighed on the market amid concerns that U.S. crude supplies may have started rising again after three weeks of draws. Industry group American Petroleum Institute (API) said after the market's settlement that U.S. crude inventories rose by 1.3 million barrels last week. The dollar soared against major currencies on speculation about the first U.S. interest rate hike in years. A stronger greenback makes dollar-denominated commodities, including oil, less affordable in other currencies. Brent crude settled down $1.66, or 2.6%, at $62.06 a barrel. U.S. crude settled at $57.71, down 52 cents, or 1%. (Reuters)
Gold Steadies off Two-Week Low as Dollar Rally Loses Steam. Gold was steady after initially falling to a two-week low on Wednesday, as the dollar retreated from a one-month high, but the precious metal remained under pressure from expectations that a U.S. rate increase may come soon. Spot gold was up 0.1% at $1,187.70 an ounce at 1853 GMT, after hitting $1,183.76 an ounce, the lowest since May 12. Silver was down 0.3% at $16.66 an ounce, while platinum was down 0.7% at $1,115 an ounce and palladium was up 0.7% at $782.75 an ounce. Silver remains the best-performing precious metal this month despite Tuesday's 2.4% drop, up 3.2% since the end of April in its biggest monthly rise since January. (Reuters)