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business
Australia braces for
unpopular budget
as boom times end
MELBOURNE: Australia is gearing
up for a tough budget on Tuesday,
facing the prospect of the largest
deficit in the country’s history as
the economy struggles with its first
recession in almost two decades.
The end of the China-driven re-
source boom that spurred Australia
to 14 years of virtually uninterrupted
growth has created economic woes
not experienced for a generation in
the so-called “Lucky Country.”
Treasurer Wayne Swan has
warned that the current situation
means the centre-left Labor govern-
ment must make “tough decisions”
on budget night that will not be
popular with the electorate.
“There will be hard choices,
unpopular decisions and no easy
options,” Swan said last week, blam-
ing the situation on the worst global
recession in 75 years.
Economists say the government’s
attempts to soften the impact of
the downturn with more than A$50
billion (RM125 billion) in stimulus
spending have also weighed on the
bottom line, creating a mountain of
debt.
The end result, according to
numerous media reports citing
unnamed government sources, will
be a budget deficit of around A$70
billion (RM175 billion) in 2009-10.
Those sources say the budget is
likely to remain in deficit for five to six
years as the government attempts to
recover from a A$200 billion (RM500
billion) slump in revenues caused by
the financial crisis. – AFP
KL market summary
CI expected to stay up
on positive sentiment
SHARE prices on Bursa Malaysia will con-
tinue to climb this week on follow through
buying interest based on the increasing op-
timism of recovery in the global economy,
says an analyst.
The market breached the 1,000 level
early last week on the back of improving
health in the global economy.
Jupiter Securities Sdn Bhd head of
Sorry research Pong Teng Siew said there was
Madrid some room for optimism in the local mar-
ket due to improvement in local economic
get a real fundamentals such as the uptrend in com-
hiding modity prices and recovery in manufactur-
pg 30 ing exports.
“There is hope that if the economy in the
US recovers, the manufacturing export will
also improve.
“We don’t know this for sure yet but
at this point the market has got a little bit
more optimistic about export, resulting in
recovery of stocks prices,” he said.
The support and resistance for the
Kuala Lumpur Composite Index would
be between 1,018 and 1,060 this week, he
added.
He said the announcement of non-farm
payrolls data in the US and Malaysia’s trade
figures will help to define the movement of
the stock market this week.
However, he cautioned that there might
be some risks with sudden profit taking
expected to creep in.
“Whilst investors can hope for gradual
upclimb within the next two to three weeks,
in between there will be intermittent profit
taking.
“Definitely it can take the market down
sharply. Very suddenly and it could be sharp,”
he warned.
On a week-to-week basis, the KLCI closed
the week at 1,026.78, up 36.04 points from the
previous week’s closing of 990.74.
The Industrial Index jumped 2.66 points
to 2,258.76, the Finance Index gained 592.56
points to 8,131.59 and the Plantation Index
rose 56.79 points to 5,038.63.
The FBMEmas was 305.78 points higher
Experts: Islamic finance must boost
regulation, professional staff
SINGAPORE: Islamic finance must strength-
en regulation, boost its professional staff and
diversify as it takes on a bigger global role
in the aftermath of the worldwide financial
crisis, experts said.
Financial products compliant with Islamic
syariah law are likely to gain in popularity as
investors seek safer havens after the ruin
caused by toxic derivatives sold globally by
mainstream western banks, they said.
However, experts warn that Islamic fi-
nancial institutions must be on their guard
against falling into the same unbridled ex-
cesses that jolted Wall Street and snowballed
into a global economic downturn.
“Islamic finance is not immune from such
pitfalls. Hence we must be careful to avoid
this error in the Islamic financial industry,”
said Muhammad Sulaiman al-Jasser, gover-
nor of the Saudi Arabian Monetary Agency.
“Islamic financial institutions are con-
tinuing to invest time and effort to improve
corporate governance and risk management
and I expect that they will continue to avoid
mistakes made in designing over-compli-
cated securities.”
He and other experts were speaking at a
recent meeting of the Islamic Financial Serv-
ices Board held in Singapore, which is aim-
ing to be a key player in Islamic finance.
Islamic banking has been left relatively
Nigeria keen to have tie-up with KPJ
KUALA LUMPUR: With its hospitals lacking facili-
ties, Nigeria is eager to see partnership between
its hospitals and Malaysian medical group KPJ
Healthcare Bhd to improve medical facilities in
the African country.
Nigeria’s Special Assistant for Micro, Small And
Medium Enterprises Development, Muhammad
Baba Kachalla, said there is at least one public
hospital in each of the 36 states in the country.
“In Nigeria, there are federal and state-level
hospitals run by the government, but almost all of
these hospitals have poor hospital facilities.
“So, I’m asking KPJ if they are interested
to come to Nigeria and partner our state gov-
ernments to help the hospitals reach world
standards,” he told Bernama in an interview on
Saturday.
He said if the medical group is interested,
they would facilitate a meeting with various state
governments to discuss the proposal.
In response to the request, KPJs group general
manager for business development (international)
and marketing Aminuddin Dawam said the com-
pany may consider the joint-venture proposal.
“They have offered to KPJ to move into the
country, and we are open about it,” he said.
He said that KPJ also received a proposal from
a private hospital called Giwa Hospital in Kaduna,
Nigeria to serve and manage the hospital.
“And that (Giwa Hospital) may interest us
theSun | MONDAY MAY 11 2009
MAY 8, 2009
INDICES CHANGE
FBMEMAS 6847.64 +27.37
COMPOSITE 1026.78 +3.31
INDUSTRIAL
CONSUMER PROD
INDUSTRIAL PROD
2258.76
305.87
79.79
-2.59
+1.92
+1.00
CONSTRUCTION 199.57 +0.52
TRADING/SERVICES 137.53 +0.53
FINANCE 8131.59 +47.43
PROPERTIES 684.14 +23.46
PLANTATION 5038.63 -24.28
MINING 291.81 +16.21
FBMSHA 7112.06 +17.59
FBM2BRD 4550.63 +72.87
TECHNOLOGY 14.89 +0.05
TURNOVER VALUE
3.254bil RM1.9bil
at 6,847.64, the FBM30 added 220.42 points to
6,552.5, the FBM2BRD went up 244.9 points to
4,550.63 and the FBM-MDQ advanced 719.07
points to 4,207.14.
Overall, volume for the week jumped to
12.764 billion shares valued at RM9.869 bil-
lion from 6.361 billion shares worth RM5.442
billion the previous week.
The Main Board turnover jumped to 10.235
billion shares worth RM9.396 billion from
5.426 billion shares valued at RM5.146 billion
previously. – Bernama
unscathed by the global financial crisis,
largely because of rules forbidding engage-
ment in the kind of risky business that sank
mainstream institutions like Lehman Broth-
ers.
Syariah law bars the payment and col-
lection of interest, which is seen as a form
of gambling.
Islamic finance also operates on the
principle of risk-sharing between the issuing
bank and the buyer of a financial product,
making it a less risky alternative to some
conventional banking instruments.
Al-Jasser, the Saudi monetary agency
governor, and other speakers told the Singa-
pore conference that Islamic finance is likely
to gather momentum in the aftermath of the
downturn.
“It is my belief that Islamic finance has
moved on to a new stage in the last few
years. In the past, it was an individual de-
cision based on faith, now it is competing
on its own very strong merits in the global
marketplace,” he said.
Islamic finance is now established in 47
countries with more than 600 institutions
managing “balance-sheet assets” worth
over US$630 billion (RM2.236 trillion), with
another US$200 billion (RM710 billion) to
US$300 billion (RM1.065 trillion) managed
as investment funds, he added. – AFP
more because it means running a private hospi-
tal, compared to managing a public hospital for
which KPJ has no expertise. But, we are willing
to look at it (Nigerian government’s proposal,”
he explained.
Aminuddin said the company may take about
three to six months to study the proposal before
making a decision.
On the group’s expansion plan, he said it is
keen to strengthen its presence in Saudi Arabia
through a joint venture. Currently, it manages two
hospitals in Jeddah.
He disclosed that KPJ will sign a partnership
deal with another Saudi party in the near term.
“Our base in Malaysia is already strong, and
now we are looking to creating our base in Saudi
Arabia. So, it would be easy for us to expand our
services in the Middle East,” he added.
With a total of 19 hospitals throughout Malay-
sia, KPJ Healthcare plans to have at least one new
hospital a year in the country.
“We are already talking with some interested
parties. It can be a takeover or a green field
project.”
Aminuddin said the company has also re-
ceived offers from Myanmar and Thailand, but
because of the political situation there, KPJ was
still monitoring the countries closely.
KPJ also has three hospitals in Indonesia and
one in Dhaka, Bangladesh. – Bernama