Share This

Friday, May 25, 2012

Malaysian GDP grew 4.7% in Q1, 2012

Malaysia's economic growth slowed to 4.7 percent in the first quarter, the government said Wednesday, due to weakening exports sparked by a stuttering global economy and debt woes in Europe.

The slower expansion in the export-dependent Southeast Asian country came after the economy grew at a 5.2 percent clip in the fourth quarter of 2011.

Malaysia is one of the fastest growing developing countries

"Domestic demand remained firm, supported by both private and public sector economic activity, while exports moderated amid weaker external demand," Bank Negara, the central bank, said in a statement.

The bank has projected growth to expand four to five percent this year, slower than the 5.1 percent seen in 2011.

Economists said the slower growth indicated that the economy was "moderating at a better pace than expected" in light of the eurozone crisis.

"One of the headwinds hitting not just Malaysia but also regional economies is the very weak growth in Europe with some countries mired in recession," said Yeah Kim Leng, chief economist with financial research firm RAM Holdings.

"The concern here is of course the slowdown is affecting Asian exports including Malaysia, given its sizeable export sector."

But Yeah said he expected the Malaysian economy to grow at 4.6 percent in 2012, backed by strong domestic demand.

In early May, the central bank kept its key interest rate at 3.0 percent for the sixth time in a row to drive domestic demand.

Inflation was 2.3 percent in the first quarter and is expected to moderate to 2.5-3.0 percent for 2012 amid lower global commodity prices and modest growth in domestic demand.

The central bank said that while the challenging external environment would remain a risk to Malaysia's growth prospects, "domestic demand is expected to remain resilient".

Prime Minister Najib Razak, who must call fresh elections by April 2013 and faces a strengthening opposition, has set a goal of Malaysia becoming a "high-income developed nation" by 2020.

He said last year that annual growth of at least 6.0 percent was needed to achieve that.

Under the plan, Najib aims to double per capita income to 48,000 ringgit ($16,000) by 2020.

The government has promised major infrastructure projects and financial market liberalisation to attract foreign investment and boost growth, but critics say the results have been limited.

Thursday, May 24, 2012

United we stand, divided we fall in South China Sea?

The continuing standoff between China and the Philippines over the Scarborough Shoal (Huangyan Island) is a reminder that Asean needs to get its act together sooner rather than later.

THE South China Sea, spread over 3.6 million sq km, has long been a hotbed of overlapping bilateral and multilateral territorial claims.

China claims “indisputable sovereignty” over three-fourths of the South China Sea, including the Paracel and Spratly group of islands, the Macclesfield Bank and the Scarborough Shoal. Parts of the Spratly islands are also claimed by Brunei, Malaysia, the Philippines and Vietnam.

The Paracels are claimed by China and Vietnam while the Scarborough Shoal involves the Philippines and China.

What makes these claims significant, and complicated, is the real possibility that the South China Sea may contain some of the world’s most significant deposits of oil and gas. Some estimates suggest that the region may contain as much as 20-30 billion tonnes of oil or 12% of global reserves.

Earlier this year, the Philippines invited foreign companies to drill for oil in the Scarborough Shoal area. China immediately condemned the move. The People’s Daily, in an editorial, even went so far as to call for “substantial moves, such as economic sanctions, to counter aggression from the Philippines”.

China has repeatedly stated that it wants to settle these conflicting claims through peaceful negotiations. However, it has not been averse to using force when challenged; it forcibly took the Paracels and seven of the Spratly islands from Vietnam following skirmishes in 1974 and 1988, respectively.

This stands in contrast to the peaceful resolution of island disputes between Malaysia and Singapore, and Malaysia and Indonesia, through the auspices of the International Court of Justice.

Malaysia and Thailand also set a sterling example in 1979 by agreeing to put aside overlapping boundary claims in the Gulf of Thailand and jointly exploiting oil resources there, a win-win situation for both sides. A similar agreement was signed between Malaysia and Vietnam in 1992.

Territorial sovereignty can, of course, be a highly emotive issue. Nations often work themselves into a frenzy and go to great lengths to defend a pile of rock, a shoal or a frozen bit of mountain.

India and Pakistan, for example, have squared off against each other for more than 20 years over a worthless patch of ice in the Himalayas, 5,700m above sea level.

More soldiers have died of harsh weather conditions than actual combat but the madness goes on with no end in sight.

In 1996, Asean ministers, recognising the potential for conflict arising from overlapping claims in the South China Sea, agreed to negotiate a regional framework for managing the issue. It has been a difficult process.

In 2002, Asean and China managed only a joint declaration committing themselves to the peaceful resolution of their territorial disputes. It has not, however, prevented tense situations from developing as we have seen in the Scarborough Shoal.

Understandably, Asean is extremely wary of upsetting China. China has become too big, too powerful, too overwhelming to antagonise.

At the same time, Asean is also deeply divided on the question of how to respond to issues that are strictly bilateral in nature or limited to just a few of its members.

The Philippines, for example, has long pressed for a tougher Asean position in order to strengthen its hand vis-à-vis China, something that other Asean countries have been reluctant to endorse fearing it will only lead to further confrontation.

There is, in fact, a sense within Asean that the Philippines has mismanaged its handling of the issue, a view that is also shared by quite a few Filipino commentators. Now that the United States has signalled its reluctance to be drawn into the dispute, Asean leaders are hoping Manila will reassess its position.

Asean needs to realise, however, that its greatest strength in dealing with China or any one else for that matter, on this or any other issue, is its own unity and solidarity. United it stands, divided it falls.

All issues that affect regional security, whether bilateral or multilateral in nature, need to be managed together for the good of the whole Asean community.

Asean leaders must, therefore, find common purpose to help develop an effective framework to resolve these kinds of disputes.

In the end, the options, short of war, in the South China Sea are limited.

China and the Asean countries can put aside their competing claims and jointly work to exploit the resources of the South China Sea, as Malaysia and Thailand have done, or resort to international arbitration.

The former could well lead to a real zone of peace, cooperation and prosperity and cement the already burgeoning relations between China and the Asean countries. The latter is bound to leave sore losers and a divided region.

For China, a win-win solution with Asean will also undercut efforts by other powers to exploit regional fears of China in an attempt to build new alliances aimed at Beijing.

Whatever it is, the worst thing Asean and China can do is to let the issue fester.

By Dennis Ignatius Diplomatically Speaking

> Datuk Dennis Ignatius is a 36-year veteran of the Malaysian foreign service. He has served in London, Beijing and Washington and was ambassador to Chile and Argentina. He was twice Undersecretary for American Affairs. He retired as High Commis­sioner to Canada in July 2008.

Related posts:
Who owns the South China Sea islets in the eyes of the world?
Manila provocation blasted; Philippine Newspaper: Huangyan ...
China warns Philippines over Huangyan Island as ...

Facebook, Zuckerberg & banks sued over IPO

The lawsuit charges the defendants with failing to disclose "a severe and pronounced reduction" in forecasts for Facebook's revenue growth in the run-up to Friday's IPO.
The lawsuit names Mark Zuckerberg, Facebook's founder, as a defendant, as well as top Silicon Valley investors Peter Thiel and Marc Andreessen. Photograph: AFP/Getty Images

Facebook, Morgan Stanley and some of the biggest names in Silicon Valley are being pursued over the social network's disastrous share sale by the law firm that won a $7bn settlement for Enron's shareholders.

Robbins Geller is co-ordinating a class action lawsuit alleging that Facebook and its bankers misled investors about the true state of their business while informing a handful of privileged clients about the company's true prospects.

The lawsuit, filed in New York, names Mark Zuckerberg, Facebook's founder, as a defendant, as well as top Silicon Valley investors Peter Thiel and Marc Andreessen, and Goldman Sachs, JP Morgan and Barclays Capital.

Facebook shareholders have sued the social network, CEO Mark Zuckerberg, and a number of banks, alleging that crucial information was concealed ahead of Facebook's IPO.

The lawsuit, filed in the U.S. District Court in Manhattan this morning, charges the defendants with failing to disclose in the critical days leading up to Friday's initial public offering "a severe and pronounced reduction" in forecasts for Facebook's revenue growth, as users more and more access Facebook through mobile devices, according to Reuters, which cited a law firm for the plaintiffs. (The case is Brian Roffe Profit Sharing Plan v. Facebook, 12-04081.)

Earlier this month, Facebook updated its filings with the Securities and Exchange Commission to say that the shift to smartphones and other mobile gadgets is cutting into the prices it can set for advertisers, which would in turn hurt the company's revenue. In March, the social network had 488 million monthly average unique users of its mobile products, out of a total of just over 900 million registered users.

The plaintiffs charge that the changes to the forecast by several underwriters of the IPO were only "selectively disclosed" to a small group of preferred investors and not to the investment community at large. "The value of Facebook common stock has declined substantially and plaintiffs and the class have sustained damages as a result," the complaint says, per the Reuters report.

Facebook's stock opened Friday priced at $38 and, aside from a slight uptick right at the start, has been trading lower since then. It closed at $31 last night. In early trading today, shares are up better than three percent to around $32.
A report from well-known Wall Street watcher Henry Blodget, citing an unnamed source, posits that a Facebook executive was responsible for telling institutional investors, but not smaller investors, about the reduction in revenue estimates.

Speaking on CBS This Morning today, Blodget described the sequence of events regarding the estimates and the failure to fully share material information. "The fact that it was only distributed verbally to a handful of institutions as opposed to all investors is a problem," he said.

This isn't the only lawsuit related to Facebook's IPO. A Maryland investor, for instance, is suing the Nasdaq stock exchange over glitches in how it handled the offering.

We're reaching out to Facebook for comment and will update this story when we hear back.

Jonathan E. Skillingsby Jonathan E. Skillings 

Facebook, banks sued over pre-IPO analyst calls

In this photo illustration, a Facebook logo on a computer screen is seen through glasses held by a woman in Bern May 19, 2012. Picture taken May 19, 2012. REUTERS/Thomas Hodel

Wed May 23, 2012 11:02am EDT
 
(Reuters) - Facebook Inc and banks including Morgan Stanley were sued by the social networking leader's shareholders, who claimed the defendants hid Facebook's weakened growth forecasts ahead of its $16 billion initial public offering.

The defendants, who also include Facebook Chief Executive Officer Mark Zuckerberg, were accused of concealing from investors during the IPO marketing process "a severe and pronounced reduction" in revenue growth forecasts, resulting from increased use of its app or website through mobile devices. Facebook went public last week.

The lawsuit was filed in U.S. District Court in Manhattan on Wednesday, according to a law firm for the plaintiffs. A day earlier, a similar lawsuit by a different investor was filed in a California state court, according to a law firm involved in that case.

In the New York case, shareholders said research analysts at several underwriters had lowered their business forecasts for Facebook during the IPO process, but that these changes were "selectively disclosed by defendants to certain preferred investors" rather than to the public generally.

"The value of Facebook common stock has declined substantially and plaintiffs and the class have sustained damages as a result," the complaint said.

Representatives of Facebook and Morgan Stanley did not immediately respond to requests for comment.


Facebook shares fell 18.4 percent from their $38 IPO price in the first three days of trading, reducing the value of stock sold in the IPO by more than $2.9 billion.

(Reporting by Dan Levine in San Francisco and Jonathan Stempel in New York; Editing by Gerald E. McCormick and Lisa Von Ahn)


Related posts:
Facebook price falls !
Facebook Tumble, blame game begin !
The Facebook Fallacy
 

Related Video


Video

Newscribe : get free news in real time