28 theSun | THURSDAY NOVEMBER 6 2008

business news

World stocks mixed as

Obama wins US vote
LONDON: European stock
markets endured heavy falls in
early trading yesterday while
Asian shares closed sharply higher
after Democrat Barack Obama was
elected US president.
Less than an hour after the start
of European trade, London was
down 1.62%, Frankfurt lost 1.29%
and Paris shed 1.69%. Madrid fell
1.27% and Zurich slipped 1.54%.
“There is an element of ‘buy
the rumour, sell the news’ that
is driving some profit-taking to
kick in,” said Martin Slaney, head
of derivatives at financial spread
betting group GFT in London.
But Asian shares hit a three-
week high as Obama’s win ended
uncertainty about who will lead
the world’s largest economy in the
midst of great financial peril.
The Tokyo stock market ended
the day up 4.46%, Hongkong
jumped 3.2% and Sydney won 2.9%
on hopes that Obama’s policies
would help to overcome a global
financial crisis, dealers said.
Wall Street was to reopen
at 1430GMT. US stocks had
staged a powerful rally on
Tuesday as Americans voted for
a new president. The Dow Jones
Industrial Average surged 3.28%,
the tech-heavy Nasdaq added
3.12% and the Standard & Poor’s
500 index shot up 4.08%.
US Treasuries fell as investors
became bolder in taking risk,
though US stock futures remained
little changed and oil succumbed
to profit-taking after signs of global
production cuts had sent crude
prices up 10% on Tuesday.
The new Obama
administration, which takes
office in January, will face the
world’s worst financial crisis
since the Great Depression, and a
potentially steep slowdown in the
global economy that has pounded
markets from Tokyo to Frankfurt
to New York.
Unprecedented measures to
rescue banks across the world,
aggressive rate cuts by central
banks, and the improvements in
credit markets have in the last
week given global markets a
respite from a thrashing, but some
still urged caution.
“The knee-jerk complacency
rally in Asia to an Obama win is
likely creating an opportunity to
sell,” said Kirby Daley, a senior
strategist for Newedge Group in
Hongkong.
“The bottom line is economic
fundamentals in the US are
deteriorating faster than the
market can keep up with. And
there is very little an Obama
administration can do to shield
Asia from the effects of this
downturn.”
In a measure that investors may
be more willing to add risk, US
Obama’s win
is arguably
likely to prove
more positive
Treasury prices fell after Obama’s for foreign
win. The two-year note’s price
traded down 3/32 for a yield of
markets given
1.44%. the perception
The dollar advanced following that he will
Obama’s election, recovering be stronger
some of the prior days losses that in terms of
saw the currency suffer its biggest
one-day slide in 13 years when dealing with
investors went searching for US economic
higher yielding currencies. problems, is
“Obama’s win is arguably likely seen more
to prove more positive for foreign
markets given the perception
favourably
that he will be stronger in terms by foreigners
of dealing with US economic generally, and
problems, is seen more favourably is less likely
by foreigners generally, and is to follow the
less likely to follow the policies of
President Bush,” Calyon said in a policies of
report. President
The dollar rose 0.7% against Bush.”
a basket of major currencies to
85.187 The euro hit the day’s low – Calyon
of US$1.2830 after the projection
of a win for Obama, and was
down 0.9% from late US trade at
US$1.2868 at 0423GMT.
Oil remained lower after the
US presidential election, with
crude down US$1.50 to US$69.05
a barrel as investors took profits
after a spike the previous session
following signs that Saudi Arabia
and other Opec members had
made promised cuts in crude
production. – AFP/Reuters

Its head of group consumer banking, Michael
Lor Chee Leng said the 16% growth target for next
year would also be driven by the bank’s transfor-
briefs mation plan called “Project Quantum Leap”.
He was speaking to reporters after launching
would use the BAE Advanced Turboprop
(ATP) and is expected to commence opera-
tion next month. – Bernama
‘World awaits Obama’s
America under Obama will adopt a pro-protec-
tionist policy to safeguard with its domestic
interests like employment, job creation, invest-
ment and businesses,” he said. – Bernama

the Earn Now Deposit Account, the first and only

EON Bank eyes quantum leap
in deposit base
KUALA LUMPUR: The EON Bank Group is targeting
to grow its deposit base to RM29 billion next year
from RM25 billion currently, as it continues to roll
out innovative products.
conventional term deposit of its kind in Malaysia
that allows depositors to access their interest
payment upfront. “With this new product, EON
Bank expects to garner RM500 million in depos-
its within three months, which is in line with the
bank’s move to expand its long term consumer
base,” Lor said. – Bernama
Air Aceh invests US$15m in
new operation
KUALA LUMPUR: A joint venture between a
Malaysian company and the Aceh govern-
ment, PT Air Aceh, will invest about US$15
million (RM52.5 million) in the next four
months for its new airline operation.
Its managing director, Datuk Najmudeen
Kader, said the new airline, called Air Aceh,
policy to boost trade’
KUALA LUMPUR: The international community
awaits the policy of newly elected US president
Barack Obama aimed at improving world trade,
International Trade and Industry Minister Tan Sri
Muhyiddin Yassin said yesterday.
He said there would be high expectations
from the international community in terms of
the foreign, trade and domestic policies to be
undertaken by Obama.
“What we would like to see is America not
only playing an important role but a critical role,
particularly in trade with developing countries
like us,” he told reporters after unveiling the
trade figures for September yesterday.
“Our concern is the economic and inter-
national crisis. The US is facing with the most
severe financial crisis. We want to see whether
Shell allocates RM300,000
for sustainable projects
KUALA LUMPUR: Shell Malaysia has allocated
RM300,000 under its Sustainable Development
Grants Programme to help boost sustainable
development projects.
Its country chairman, Datuk Saw Choo
Boon, said non-governmental organisations and
special-interest groups involved in sustainable
development activities could now advance their
initiatives via the programme.
“The world will need large amounts of energy
in the coming decades to support economic
growth and reduce poverty. And this energy will
need to be produced in environmentally- and
socially-responsible ways including dealing with
greenhouse gas emissions,” he said after the
launch of the programme yesterday. – Bernama

M’sia not badly hit by global

economic turmoil: Isis
KUALA LUMPUR: The impact of the global
economic turmoil on the economy is not so
serious at the moment as Malaysia has a rela-
tively resilient financial sector, according to the
Institute of Strategic and International Studies
(Isis) Malaysia.
Its director-general Dr Mahani Zainal Abidin
said Malaysia has the capacity to bolster the
economy if the global economic landscape
continued to deteriorate.
“Hopefully, the coordinated response
from the real sectors by the world’s leading
economies will arrest the global economic
slowdown,” she said at the CEO Breakfast
Forum on Current Global Economic Challenges
hosted by Malaysian Rating Corporation Bhd
here yesterday.
Mahani said China, Japan and South Korea
have a crucial role to boost regional growth.
“For example, if China slows down, there
would be a lot of implications.
“That is why the meeting of the G20 on Nov
15 is very critical,” she said.
The G20 leaders are expected to review
progress being made to address the current
financial crisis as well as to agree on a common
set of principles for reforms of the regulatory
and institutional regimes.
Among the areas of concerns now were the
multiplier effects of the economic stabilisation
plan, risks of rising unemployment, impact of
the sharp drop in oil and palm oil prices, impact
of the steep decline in the stock market and
the depreciating ringgit.
Investment (gross fixed capital formation)
as a percentage of the gross domestic product
(GDP) deteriorated to 21.8% last year compared
to the 30-40% levels achieved in the 1990,
Mahani said.
Furthermore, Malaysia has the highest
fiscal debt as percentage of GDP among
Asean nations and the fiscal position has not
returned to surplus after the 1998 crisis, she
said.
Mahani said the stimulus package an-
nounced by Deputy Prime Minister Datuk Seri
Najib Abdul Razak on Tuesday would restore
public and investors confidence to spend.
She said it would also boost the infra-
structure and construction sectors as well as
increase disposable income.
“I expect there will be a series of measures,
depending on the situation, from time to time,”
she added. – Bernama