SINGAPORE, Apr 30: Singapore’s economic recovery is likely to be muted with continued weakness in electronics a drag on growth, the central bank said on Monday, painting a less rosy picture of the economy compared with other forecasters.
‘Despite the rebound in Q1, the pace of recovery for the rest of the year is expected to be relatively subdued,’ the Monetary Authority of Singapore (MAS) said in its half-yearly macroeconomic review issued on Monday.
‘The recovery largely reflected the normalisation of production activities following the series of regional supply-related shocks in 2011,’ the central bank added.
MAS’s view contrasts with the results of a survey released on Monday by Singapore’s main economic development agency, which showed manufacturers in the city-state have become more optimistic about prospects in the six months ending in September.
‘Overall, a weighted 19 percent of manufacturers foresee an improved outlook while a weighted 4 percent predict deterioration,’ the Economic Development Board said. The majority had expected conditions to worsen in the previous quarterly survey.
‘This optimistic outlook is led by the semiconductor segment, which anticipates improved global demand for chips in the months ahead as inventory levels are adjusted downwards,’ it added.
However, the central bank’s view is consistent with employment data that showed the manufacturing sector shed 500 jobs in the first quarter, pushing the jobless rate higher to 2.1 percent from 2.0 percent in October-December.
MAS earlier this month surprised financial markets by saying it will tighten monetary policy slightly because of persistent inflationary pressures.
The move came as data showed the economy expanded 9.9 percent in the first quarter on an annualised and seasonally adjusted pace from October-December, beating forecasts.
The government’s latest forecast is for economic growth of 1 to 3 percent this year, with headline inflation expected to come in at a higher 3.5 and 4.5 percent, indictating the difficulty faced by MAS as it tries to stem price pressures without hurting exporters.
Several economists have predicted Singapore’s growth this year could exceed the official forecast, citing the recovery in manufacturing and still buoyant services and domestic demand.
ELECTRONICS, INFLATION
On electronics, MAS said the first-quarter upturn was largely due to transitory factors such as the recovery in disk drive production after flooding in Thailand shut many factories late last year, disrupting global supply chains.
‘The export price erosion appears to be starker in Singapore compared to the rest of the region,’ it added, noting the city-state’s electronics firms produced ‘midstream’ products such as semiconductors and disk-related parts that face greater pricing pressures than completed goods.
Electronic manufacturers also faced ‘pronounced cost pressures’ from the tight job market and higher foreign worker levies as well as a hefty 17 percent rise in electricity prices last year, the central bank added.
‘Trade-related services could see a slower upturn compared with the more sanguine prospects for the domestic-orientated sectors,’ it said.
Turning to inflation, MAS reiterated its latest forecasts and said higher wages and global oil prices will put upward pressure on prices. Inflation will remain elevated and ease only gradually over 2012.
The central bank, which had previously pegged 2012 inflation at 2.5 to 3.5 percent, added that business costs are likely to rise as Singapore makes it harder for firms to bring in cheap foreign labour.
MAS said headline inflation across the region is expected to ease slightly as a result of the high base in 2011.
‘(But) with many economies currently operating close to potential output, a resurgence in global economic growth could cause underlying price pressures to intensify.’
(AGENCIES)
Electronics to be drag on Singapore growth-cbank
Sri Lanka rupee should stabilise below 125 a dlr-official
COLOMBO, Apr 30: The Sri Lanka rupee should stabilise below 125 per dollar and there is no reason for the currency to depreciate beyond that, Treasury Secretary P.B. Jayasundera said on Monday.
‘There is no economic or fundamental reasons for the rupee to go beyond 125 a dollar,’ Jayasundera told reporters in Colombo. ‘The recent fall is mainly due to speculation. I do not see any reason for the rupee go beyond 125 level.’
The rupee hit a record low of 133.50 on Wednesday, but has since recovered some ground and is trading around 130.50 a dollar on Monday.
(AGENCIES)_
European stock index futures signal higher open
LONDON, Apr 30: European stock index futures pointed to a higher open on Monday after weaker-than-expected U.S. Growth data raised expectations for more monetary stimulus from the U.S. Federal Reserve, while firmer copper prices could support miners.
At 0607 GMT, futures for both Euro STOXX 50 and Germany’s DAX were 0.7 percent firmer. (AGENCIES)
RBI study for higher FDI cap in insurance sector
NEW DELHI, Apr 30: The Reserve Bank has said there is a case for hiking FDI cap in insurance and some other sectors in view of India’s growing integration with the global economy, if local economic and political scenario permits.
“… As the economy integrates further with the global economy and domestic economic and political conditions permit, there may be a need to relook at the sectoral caps (especially in insurance) and restrictions on FDI flows (especially in multi-brand retail),” RBI has said in a study, released earlier this month, on FDI flows to India.
The study said there are certain sectors, including agriculture, where FDI (Foreign Direct Investment) is not allowed, while sectoral caps in some sectors such as insurance and media are relatively low compared to the global patterns.
“In this context, it may be noted that the caps and restrictions are based on domestic considerations and there is no uniform standards that fits all countries,” it added.
RBI said the demands for raising the present FDI limits of 26 per cent in the insurance sector may be reviewed taking into account the changing demographic patterns as well as the role of insurance companies in supplying the required long term finance in the economy.
Commenting on the need for a higher FDI limit in the insurance sector, Monish Shah, Senior Director of consultancy giant Deloitte in India, told that insurance is a high gestation, capital intensive business and the sector needs fresh capital to fund its existing businesses and expansion.
“Increased capital will benefit the industry as a whole by increasing the insurance access and penetration in the country.
“Increase in FDI in insurance from a strategic minority to a dominant minority is one of the reforms which is being eagerly awaited by several industry players; as despite the slowdown, Indian insurance sector remains attractive in the long term,” he added.
Noting that life insurance industry is long-term in nature and requires years of capital infusion, MetLife India’s Managing Director and Country Manager Rajesh Relan said: “Capital infusion through FDI will help grow the industry by increasing customer coverage with a range of innovate products that are clearly focused on today’s uninsured.
He further said that growth of insurance sector would also help in developing other sectors and providing capital to the government for long-term infrastructure projects.
The RBI study found that sectoral cap was higher than India even in China for insurance and a few other sectors, while countries like Brazil and Russia have higher sectoral caps than India across most of the sectors. (PTI)
Ex-Libyan oil minister body found in Danube: Austrian police
VIENNA, Apr 30: The body of Libya’s former oil minister Shukri Ghanem, who had defected from Muammar Gaddafi’s regime, was found today in the Danube, Austrian police said in a statement.
No trace of violence was found on the body, police spokesman Roman Hahslinger said, adding that “it is possible that he felt unwell and fell into the water”.
An autopsy will be carried out to determine the cause of death.
Earlier, APA news agency had reported that Ghanem, 69, was found dead in his apartment after having apparently suffered from a heart attack.
The news agency based its report on an Islamic expert, Amer al-Bayati, who was in turn citing Ghanem’s family.
Ghanem served as Libya’s oil minister from 2006 to 2011.
At the height of the crisis in Libya, he crossed over to neighbouring Tunisia in mid-May 2011, by car and became one of the highest-ranking officials to defect from the regime.
His defection came just weeks before he was due to represent Libya at an Organisation of Petroleum Exporting Countries meeting in Vienna.
In June, he announced his defection through Italian news agency ANSA, saying he left his home country to “to join the choice made by young Libyans to fight for a democratic country”.
However, Ghanem added that he was not working with the National Transitional Council, which is Libya’s current interim government.
Instead, he sought refuge in Vienna, a city he knows well having not only travelled there regularly as oil minister for OPEC meetings, but also having lived there when he was director of OPEC’s research division from 1993 to 2001.
He later returned to Libya where he was economy minister, before being named prime minister in June 2003.
In 2006, as he took over the oil minister portfolio, he was also appointed chairman of the National Oil Corporation.
Ghanem’s funeral may be held in Libya, APA said, quoting Bayati. (AGENCIES)
Egypt’s military pledges to secure Saudi missions
CAIRO, Apr 30: Egypt’s military council has pledged to secure Saudi diplomatic missions in the country, an effort to repair relations with the kingdom a day after it shut its embassy in Cairo.
Saudi Arabia recalled its ambassador to Cairo for consultations after what it said were “unjustified” protests by Egyptians that violated the missions and threatened staff.
Demonstrators were complaining about the arrest of an Egyptian lawyer in Saudi Arabia.
It’s the worst diplomatic spat between Egypt and Saudi Arabia in decades.
In a statement today, Egypt’s ruling military council criticised the demonstrators. It said the protests were “irresponsible behaviour” that should not shake strategic Egyptian-Saudi relations.
It said it is committed to securing the missions. (AGENCIES)
Obama not politicising bin Laden anniversary: White House
WASHINGTON, Apr 29: Barack Obama’s top advisor on terrorism brushed aside criticism by the president’s political opponents that he has exploited this week’s one-year anniversary of Osama bin Laden’s killing for political gain.
“I don’t do politics. I don’t do the campaign. I am not a Democrat or Republican,” said chief White House counterterrorism advisor, John Brennan.
“All that I know is that the president made the decision when he was given the opportunity to take a gutsy decision, to carry out that raid with our special forces in Abbottabad, Pakistan,” Brennan told ABC television’s “This Week” programme.
“The president made that decision. I think the American people are, you know, clearly very appreciative and supportive of that decision. We’re safer today as a result,” he said.
Brennan noted that Obama took the decision to go forward with the raid against the advice of some of his most senior advisors who had reservations about the operation, which was fraught with peril for the Navy Seals sent into Pakistan to carry it out in the dead of night.
Obama’s campaign last week released a video to mark the anniversary and suggested that Osama bin Laden might be alive today had Republicans’ soon-to-be presidential nominee Mitt Romney been in the White House.
US Senator John McCain, who lost to Obama in the 2008 presidential election and who remains one of the president’s most dogged critics, said last week that the advertisement politicised an issue that ought become fodder for November’s presidential campaign.
“Shame on Barack Obama for diminishing the memory of September 11th and the killing of Osama bin Laden by turning into it a cheap political attack ad,” he said.
“He’s doing a shameless end zone dance to help get himself reelected. No one disputes that the president deserves credit for ordering the raid, but to politicise it in this way is the height of hypocrisy.”
In the upcoming presidential campaign, Romney, the former governor of Massachusetts, is seeking to unseat the Democratic incumbent Obama, mostly for what he says has been faulty stewardship of the economy. But like McCain he also criticises the president’s handling of military and security matters.
Obama campaign advisor Robert Gibbs meanwhile told NBC television that the success campaign to hunt down and kill bin Laden was “fair game” on the campaign trail. (AGENCIES)
China launches two more satellites for navigation system
BEIJING, Apr 30: China today successfully launched two more satellites for its proposed Beidou global navigation and positioning network being built to counter the US Global Position System (GPS).
With the two, China has so far launched 13 satellites to form part of the Beidou system.
The Beidou-2 satellites, launched from the Xichang Satellite Launch Center in the southwestern province of Sichuan, was boosted by a Long March-3B carrier rocket and has entered the scheduled orbit, the center said in a statement.
It is the first time China has launched two navigation satellites with one rocket, and the two satellites will help to improve the accuracy of the Beidou, or Compass system, it said.
China will launch three more satellites for the Beidou network this year and a global satellite positioning and navigation system will be completed in 2020 with more than 30 orbiters, it said.
Today’s mission marked the 160th flight of China’s Long March series of carrier rockets, state-run Xinhua reported. (PTI)
UN’s Ban meets Myanmar leader to encourage reforms
NAYPYIDAW, Apr 30: UN chief Ban Ki-moon held landmark talks with Myanmar’s president today in a high-profile show of support for changes sweeping through the former pariah state.
During his three-day visit, Ban is expected to urge further steps towards democracy and appeal for unfettered humanitarian access to tens of thousands of refugees who have fled ethnic conflict.
“I would like to extend a warm welcome from the people of Myanmar,” said President Thein Sein as the pair met at his official residence in the capital Naypyidaw ahead of an address by the UN leader to the country’s parliament.
Ban is also due to meet opposition leader Aung San Suu Kyi on what is his first trip to the country formerly called Burma since decades of military rule ended last year.
It is a far cry from his previous visit in 2009 when the junta dismayed Ban by refusing to allow him to see the Nobel Peace Prize laureate, who was under house arrest at the time.
Suu Kyi has spent much of the past two decades locked up but was freed in 2010 and recently won her first ever seat in parliament in the most visible sign of change under a new quasi-civilian government.
The veteran activist, however, will not be in parliament to hear Ban’s address—the first by a visiting foreign dignitary to the fledgling legislature—because she and other opposition members are refusing to take their seats in a dispute over the swearing-in oath.
Suu Kyi’s National League for Democracy (NLD) has said it will not pledge to “safeguard” an army-created constitution, in the first sign of tension with the government since the April 1 by-elections. The UN leader is now set to meet Suu Kyi in Yangon tomorrow.
During his visit to Naypyidaw for talks with President Thein Sein, the UN announced that it would help Myanmar to conduct its first census in 31 years, offering technical support and help mobilising financial support.
Thein Sein, a former army general, has ushered through a broad range of changes since coming to power last year, including welcoming Suu Kyi’s party into the political mainstream and freeing political prisoners.
Ban is expected to urge the regime to grant the UN unhindered humanitarian access to tens of thousands of refugees who have fled fighting between the military and ethnic minority rebels in northernmost Kachin state.
Although the UN recently managed to send aid convoys into hard-to-reach parts of Kachin, many refugees remain in dire need of assistance and with the monsoon looming, conditions are expected to become even more desperate.
Ban’s visit comes amid a flurry of diplomatic activity to bring the long-isolated state back into the international fold. The European Union’s top diplomat Catherine Ashton is also in Myanmar for talks with Thein Sein following the recent suspension of EU sanctions against the long-isolated country to reward political changes. (AGENCIES)
S Korean coastguard arrest nine Chinese sailors
SEOUL, Apr 30: Chinese sailors armed with clubs and other weapons today injured four South Korean officials who had boarded their boat on suspicion of illegal fishing, the coastguard said.
They said nine Chinese have been arrested for the attack on the four officials who boarded the 227-ton boat in the Yellow Sea near Heuksan Island.
One South Korean fell overboard after being hit with a club but was rescued, while three others sustained injuries to their heads, arms and legs. They were taken by helicopter to a hospital in the southwesten port of Mokpo.
“The Chinese sailors were seized while trying to escape. They are being taken to our base,” a coastguard spokesman in Mokpo told AFP.
Seoul urged Beijing to take stronger action against illegal fishing after a Chinese skipper murdered a South Korean coastguard officer during an operation to stop illegal fishing last December.
The skipper was sentenced to 30 years in prison in April. Nine other Chinese crew members were given jail terms ranging from 18 months to five years.
It was the second time a South Korean coastguard had died at the hands of Chinese fishermen in less than four years and the incident sparked widespread public anger.
South Korea has announced plans to spend USD 811 million between 2012 and 2015 on better equipping its forces as part of a crackdown on poaching, including issuing more firearms.
It seized 475 boats last year compared with 370 in 2010.
When stopped, Chinese crews have often fought back with metal pipes and knives or lashed their boats together to deter boarders. (AGENCIES)