theSun | MONDAY MAY 4 2009 13

business

ADB: Asia must retool to

boost domestic demand
NUSA DUA (Indonesia): Asia must boost by slashing benchmark lending rates and countries such as China and India, while
market summary
APRIL 30, 2009

domestic consumption and end its de- spending billions of dollars to stimulate others said it meant a “dangerous” expan-
pendence on exports as external demand their economies. sion of lending by a bank with a record of INDICES CHANGE
plunges in the world economic slump, the But Kuroda said such measures would weak oversight. FBMEMAS 6541.86 +154.61
Asian Development Bank said yesterday. not be enough without structural reform to Chinese Vice-Finance Minister Li Yong, COMPOSITE 990.74 +23.28
The call was echoed by regional finance end the region’s dependency on demand Indian Finance Secretary Ashok Chawla INDUSTRIAL 2256.10 +33.28
ministers gathered at the ADB’s annual CONSUMER PROD 303.32 +3.60
from rich countries. and Indonesian Finance Minister Sri Over the INDUSTRIAL PROD 74.32 +0.25
meeting on the Indonesian resort island “Over the longer term, developing Mulyani Indrawati were among the offi-
of Bali, where strategies for overcoming Asia is starting the process of rebalancing cials who backed Kuroda’s calls for efforts
longer term, CONSTRUCTION 189.60 +5.69
the worst financial crisis in 70 years took growth from excessive dependence on ex- to stimulate domestic consumption. developing TRADING/SERVICES 133.74 +3.95
FINANCE 7539.03 +117.32
centre stage. ternal demand to greater resilience on both They called for traditional methods such Asia is PROPERTIES 621.28 +19.62
Meanwhile the finance ministers of the consumption and investment,” he said. as greater spending on infrastructure, but starting the PLANTATION 4981.84 +141.44
Association of Southeast Asian Nations “Already there are signs that domestic also stressed the need for more investment process of MINING 255.33 -2.03
(Asean) plus China, Japan and South Korea consumption is remaining strong in Asia in education and social safety nets to give FBMSHA 6886.77 +181.78
moved closer to the creation of a regional and may well lead the way out of this Asian consumers, especially the poor, the re-balancing FBM2BRD 4305.73 +35.37
currency pool designed to bolster crisis-hit downturn.” confidence to spend. growth TECHNOLOGY 12.90 +0.26
economies. The ADB is predicting growth of 3.4% The ADB says the economic crisis has from TURNOVER VALUE
Japanese Finance and Economy Min- for the region this year, compared with kept some 60 million Asians in extreme excessive 1.639bil RM1.783mil
ister Kaoru Yosano said Japan and China more than 9% in 2007. poverty who otherwise would have been
had each agreed to chip in US$38.4 billion The bank plans to increase its overall able to improve their standards of living.
depen-
dence on
(RM139 billion) for the US$120 billion
(RM434.4 billion) scheme known as the
lending assistance by more than US$10
billion (RM3.62 billion) this year and next,
In addition to the Chiang Mai swap
pool, Yosana said Japan was considering a external Bursa expected to
Chiang Mai Initiative.
ADB president Haruhiko Kuroda said
including US$3 billion (RM10.86 billion) to
support more fiscal stimulus spending.
scheme to offer yen swaps worth up to ¥6
trillion (RM218.65 trillion) to be tapped in
demand be steady this week
to greater
Asia’s main export markets had experi- That would bring total ADB assistance emergencies. SHARE prices on Bursa Malaysia are
enced a “massive contraction in demand” during the period to about US$32 billion Such swap agreements can be tapped resilience expected to be steady this week with
since the implosion of the US mortgage (RM119 billion), compared with about to ease liquidity trouble as they boost the on both buying interest still likely to focus on
market triggered the global banking crisis US$22 billion (RM79.64 billion) in 2007 and amount of foreign currency regional banks consump- banking, plantation, gaming, steel and
last year. 2008, it said. can access while helping companies that tion and construction stocks, dealers said.
The flow-on effect had seen interest The increased lending is possible thanks use foreign currencies when trading. They said the positive outlook for
rates on bonds spike higher and Asian cur- to a decision by member states last week to The ADB has said growth could lift to
invest- the domestic economy in the second
rencies depreciate with the flight of foreign triple the ADB’s capital base, from US$55 around 6% in developing Asia next year. ment.” half of the year, coupled with the US
capital out of emerging markets, he told a billion (RM199 billion) to US$165 billion The bank focuses on lending for poverty – Kuroda Federal Reserve’s outlook that the
seminar alongside Asian finance ministers (RM597.3 billion). alleviation in Asian developing nations and economy is improving, will boost buy-
including Yosano. Some critics said the move was unneces- has 67 member countries including 19 ing momentum in the local market.
Asian governments have responded sary given the massive reserves of member from outside Asia. – AFP However, they said, profit-taking
may limit the gains.
“Persistent buying in selected

ADB wants to share M’sia’s experience
NUSA DUA: The Asian Devel-
opment Bank (ADB) is keen to
share Malaysia’s experience
and expertise in helping mem-
ber countries in generating eco-
nomic growth and wellbeing
of the people, Second Finance
Minister Datuk Seri Ahmad
Husni Hanadzlah said.
He said this was expressed
by the ADB president Haruhiko
Kuroda during a meeting
with him on Saturday on the
sidelines of the ongoing 42nd
Annual Meeting of the Board of
Governors of the ADB here.
“We’ve had a lengthy dis-
cussion on enhancing further
cooperation between ADB and
the government of Malaysia,
and also the private sector in
Malaysia,” Husni told Bernama
here yesterday.
He said Malaysia would
continue to support ADB for
the benefit and prosperity of the
Asia and the Pacific Region.
Malaysia has joined other
ADB member countries in sup-
porting the Fifth General Capi-
tal Increase (GCI V) to meet the
capital requirements of ADB in
assisting countries affected by
the global economic crisis.
Husni, leading the Malay-
sian delegation to the meet-
ing and also to the Asean+3,
welcomed ADB’s proposal,
stating that although Malaysia
has been relatively successful
in developing the nation, it
still needs to learn from other
countries.
Going forward, he said,
Malaysia is transforming its
economy from mixed labour
and capital-intensive to
value-added economy, and is
introducing further economic
liberalisation.
“Malaysia also wishes to
strengthen its bilateral and
multilateral cooperation, which
is in line with our development
philosophy of mutual benefit.”
He said the president of
ADB also stated his desire to
strengthen the relationship with
the private sector in Malaysia
through fi-
nancing, which was very much
welcomed as Malaysia saw a
real need for ADB to enhance
its support for private sector
activities.
“This is especially so in
areas that will directly help
to generate economic growth,
create employment, to increase
income earning opportunities
and to encourage existing, as
well as new entrepreneurs.”
“Continuous support to the
private sector is also crucial in
contributing towards economic
liberalisation,” he said.
In that respect, Husni hoped
that more Malaysian companies
would be given opportunity to
implement projects financed
by ADB.
In 2008, ADB awarded con-
tracts worth US$200 million
(RM744 million) to Malaysian
companies in the form of
goods, related services and civil
works as well as consulting
services as compared to year
2007, where Malaysian
companies managed to get
contracts worth US$111 mil-
lion (RM412.9 million).
Husni said Malaysia has also
agreed to ADB’s proposal to or-
ganise a Business Opportunity
Seminar in Malaysia this year
aimed at informing the busi-
ness community in Malaysia
of ADB-financed projects.
Malaysia has appointed the
Construction Industry Devel-
opment Board (CIDB) to be the
co-organiser of the seminar,
the purpose of which was to fa-
miliarise prospective supplier,
manufacturers and contractors
with ADB procedures for pro-
curement of goods and works,
and prospective consultants
with ADB procedures for re-
cruitment of consultants.
The ADB Meeting of the
ADB Board of Governors, held
here from Saturday to tomor-
row involved around 3,500
representatives of 67 countries.
– Bernama
heavyweights will help the key index
to extend its gains this week,” a dealer
said.
He said some rotational play, par-
ticularly on small- and big-cap stocks,
will continue to dominate the market
this week.
The market started the previ-
ous week on negative territory on
profit-taking after the market run-up
recently.
News on the outbreak of the swine
flu also encouraged investors to cash
Rivals out their position.
are run- However, the market managed to
ning out stage strong rebound on Thursday,
encouraged by firm Wall Street as well
of time: as regional markets.
Ferguson The local bourse was closed on
pg 31 Friday for Labour Day.
On Friday-to-Friday basis, the
benchmark KLCI was lower by 1.94
points at 990.74.
The weekly turnover increased to
6.361 billion shares worth at RM5.443
billion from 5.514 billion shares worth
RM5.822 billion the previous week.
Volume on the Main Board, how-
ever, declined to 5.427 billion units
valued at RM5.147 billion from 5.447
billion units valued at RM5.598 billion
previously.
The Second Board’s volume in-
creased to 550.146 million shares worth
RM237.525 million versus 437.317 mil-
lion shares worth RM135.410 million
previously. – Bernama

GM could follow Chrysler into bankruptcy: Analysts
DETROIT: General Motors
could soon follow Chrysler into
bankruptcy protection and the
process is unlikely to be simple
or swift for either troubled auto-
maker, analysts warned.
“Bankruptcy may indeed be
the last, best option to restruc-
ture General Motors because
of the multitude of challenges
the company faces and its
deeply entrenched stakehold-
ers,” said Doug Bernstein, head
of Plunkett Cooney’s banking,
bankruptcy and creditors’ rights
law practice group.
“But it’s unrealistic to expect
that the process will go smoothly
and quickly,” Bernstein said.
“The company is massive, its op-
erations are complex, and it has
thousands of potential claimants
and interested parties.”
In announcing Chrysler’s
bankruptcy Thursday, President
Barack Obama insisted that
“Chrysler and GM are going to
come back” and said a restruc-
turing under court protection,
along with a partnership with
Italy’s Fiat, would give Chrysler
“a new lease on life”.
While Obama said his team
would continue to work with GM
to develop a long-term viability
plan ahead of a June 1 deadline
he also warned that “we simply
cannot keep this company or
any company afloat on an end-
less supply of tax dollars”.
Canadian Prime Minister
Stephen Harper warned that both
the US and Canadian govern-
ments “will insist that all of the
stakeholders make the sacrifices
necessary to ensure the long-run
viability” of General Motors.
“If they do not, govern-
ments will not participate in
the restructuring,” he said
after announcing that the Cana-
dian government would allocate
US$2.4 billion (RM8.688 billion)
to help Chrysler emerge from
bankruptcy.
A smattering of bondhold-
ers were blamed for blocking a
deal to restructure Chrysler out
of court and GM’s bondholders
seem equally intransigent. – AFP
Maybank now one of best-cap banks
KUALA LUMPUR: Malayan Banking Bhd (Maybank) is now
one of the best capitalised banks in Asia after the successful
completion of its RM6.02 billion rights issue.
In a statement here on Saturday, Maybank said the
rights shares, listed on Bursa Malaysia last Thursday and
said to be the largest in Malaysian corporate history, were
oversubscribed by 128%.
Its president/chief executive officer, Datuk Seri Abdul
Wahid Omar, said the rights issue reflected strong investor
confidence in the Maybank brand and the long-term growth
strategy of the group.
He said investors’ response to the exercise has been
most encouraging, more so given that it was achieved in a
challenging economic environment. – Bernama