Dateline Wednesday 14 January 2009.

DAILY MARKET COMMENTARY.

Tuesday Markets Closing Prices.

KLCI 913.70 down 9.87 or 1.07%.
DJIA 8,446.56 down 25.41 or 0.30%.
Crude Oil US$37.78.
March FCPO RM1,885.
Ringgit 3.5760.

NEWS.

The Economic Planning Unit to review the price of gas supplied to the energy sector and submit a report to the Energy, Water and Communications Ministry for a tariff review. Lower power rates can be expected soon as the price of gas now is lower than last year and the price of coal had dropped to US$75 a ton from between US$120 t0 US$140.

COMMENT.

This are among the remedies taken to tackle the Malaysian economic slowdown. I believed further measures should be taken to arrest the economic decline with the main objectives of immediately putting money into the 'rakyat' pocket to spur the domestic demand as it will be hard for us to exports our way out of trouble this time around.

Measures such as mentioned below should be taken :-
1. Nationalization of the toll concessionaires which is in my mind is better than any economic stimulus and not only good for the economy but also a very good political move.

2. Further reduction of fuel pump prices according to the world prices. Based on current world market price the petrol pump prices should be around RM1.00 to RM1.20 level.

3. Immediate reduction of interest rate (OPR) by BNM to possibly as low as 0 to 0.25% which will result in banks charging customers of 0 to o.25% BLR (OPR) plus 1% only.

The substantial savings from the above measures if taken immediately by the Government will definitely be enormous.


MITI proposed the employers to retrench the foreigners first as they made up 57% of factory workers workforce.

COMMENT - This is a ridiculous policy for the Government to attract FDI based on cheap foreign labour. Priority should be given to the locals with a better salary scale.


WORLD NEWS.

Fed Chairman Greenspan said fiscal stimulus is not enough to shore up the US economy and more need to be done to strengthen the US banks.

For 2009, a US economy contraction of between 1.5% to 2% or even more can be expected.

For Dec. 2008, China exports were down by 2.8% and imports were down by 21.3% as growth slow down considerably due to global recession.

China GDP growth this year is expected to be around 5% which can be feels as a recession for the man on the street as the unemployment level currently hit 10%.

COMMENT.

No engine of growth for the world economy at the moment as the Japanese is not expected to recover for the next two years and the European Union economies are also having trouble coping with the recession.