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Malaysia News Update - May 2002
March surplus exceeds analysts' forecast	The country recorded a trade surplus in March of RM5.1bil, a figure economists said was better than had been anticipated. March's trade surplus represented a 35.54% expansion over February's figure of RM3.8bil and was the highest value posted since September 2001. Total exports in March were stronger to the tune of RM30.8bil, a 27.2% increase over February's RM24.2bil. Both total exports and imports for March were the highest since November 2000 and the highest monthly rate of growth seen since March 1997.
Healthy 1.1% growth in the 1st quarter	After two consecutive quarters of negative growth, the Malaysian economy turned around to record a healthy 1.1% growth in the first quarter of this year.
Manufacturing still vital	The manufacturing sector will remain a very important segment of Malaysia's economy even as the services sector gains prominence and significance, said Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz. Total sales value in the manufacturing sector soared by 17.3% in March to RM25.8bil from RM22bil in February this year, said the Statistics Department
72% Q1 profit rise for banking system	The banking system has recorded a RM2.4bil, or 72.3%, increase in profit in the first quarter this year, said Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz at the Malaysian Banking & Financial Services Summit 2002 in Kuala Lumpur.
Private sector must take the lead again	The private sector, which has been lethargic in recent years, will be the engine of growth in the 2003 Budget. Prime Minister Datuk Seri Dr Mahathir Mohamad, who would present the Budget in September, said it would focus on efforts to propel the private sector back to its pre-1998 financial crisis role.
Merrill Lynch: Cash calls to triple this year	The amount of funds raised through cash calls is expected to triple this year in line with the recovery of the KLSE, with cash calls in the first three months of 2001 totalling RM3.2bil, half the amount raised for the whole of last year.
Malaysia a better choice to invest, says Bank of China	Malaysia is a better choice for Chinese businessmen to invest in as it offers many plus points, according to Bank of China (M) Bhd general manager Zhang Lian Li. He said that apart from the social and political stability Malaysia had a good financial system and on top of that rich in natural resources.
Malaysian banks can rise to global challenge	Chief executive officers of three anchor banks have expressed confidence in the ability of local banks to meet the challenge from foreign banks once the banking industry is opened to further competition under Bank Negara's plans to liberalise the sector.
NEAC to study potential growth sectors	The National Economic Action Council (NEAC) will conduct fresh studies on growth potential sectors to strengthen the national economy, its executive director Datuk Mustapa Mohamed said. Among them were transportation, unemployment, criteria needed by employers in offering posts to graduates, including skills, expertise and language proficiency, he said.
Amount of funds invested in Malaysia up in 2001	As at Dec 31, 2001, the amount of funds invested in Malaysia thro-ugh fund management stood at RM49.91bil, an increase of 20.5% from end-2000 while funds invested outside Malaysia amounted to RM1.10bil, down 51.1% from end-2000.
Productivity to grow by 2.7%	The Malaysian manufacturing sector recorded a decline in productivity to 3.4% last year from 11.1% a year earlier as a slowdown in the world economy affected the demand for manufactured goods. However, it is expected to grow by 2.7% this year, thanks to the government's stimulus economic package and the overall improvement in the world economy.
Danaharta managed NPLs worth RM47bil last year	Pengurusan Danaharta Nasional Bhd has dealt with 2,902 non-performing loan (NPL) accounts totaling RM47.69bil as at the end of last year. As of Feb 19, 2002, Danaharta has appointed special administrators (SAs) over 61 groups of companies (or 113 companies), of which 42 groups (or 91 companies) are still at various stages of special administration. The organisation is now moving into the resolution phase of its life cycle.
Matrade and Mida set up trade offices in Shanghai	In efforts to boost trade and investment links between Shanghai and Malaysia, the Malaysia External Trade Development Corporation (Matrade) and Malaysian Industrial Development Authority (Mida) opened their trade and investment offices in Shanghai.
Asean countries still Malaysia largest trading partners	Asean member countries remain the largest trading partners for Malaysia, contributing 24% of the country's global trade last year, International Trade and Industry Ministry (Miti) principal assistant director Ho Koon Seng said. However, Malaysia's trade with Asean decreased by 17.7% to RM147.6bil, from RM173.7bil in 2000
Malaysia's competitive ranking improves	Malaysia has risen from 29th position in 2001 to 26th this year in the index of 49 countries, its highest ranking since 1998. The move represents an improvement of nearly 20% in the assessment score over year 2001. Malaysia now ranks higher in the IMD World Competitiveness Index than South Korea (27th), Japan (30th), China (31st), Thailand (34th), the Philippines (40th) and Indonesia (47th).
SC relaxes rules on unit trust funds buy	As part of measures to gradually liberalise the investment management industry, the Securities Commission (SC) introduced a new policy that allows a group of companies or individuals to have an interest in more than one unit trust management company (UTMC).
Liquidity framework now covers discount houses	As part of its continuous effort to enhance the framework for prudential regulation within the financial sector, Bank Negara has extended the implementation of the liquidity framework to the discount houses industry.
Malaysia's SuperBrands	Malaysia has emerged as the leading Asian country, excluding Japan, in the Reader's Digest Asian SuperBrands Survey with the highest number of companies winning the publications' annual top awards. A total of 25 companies received the SuperBrand Platinum awards while 36 companies received the SuperBrands Gold awards at an awards ceremony for Malaysian winners in Petaling Jaya recently.
EAEG best forum for ASEAN members to approach Beijing	Containing or isolating China is not the way for Asean members to boost their economy, Datuk Seri Dr Mahathir Mohamad said. The best way would be through engaging China via the East Asia Economic Grouping (EAEG), the Prime Minister said. "As China will be a member of the EAEG, challenges it poses that may be damaging to South-East Asian countries can be discussed in the forum and mitigated".
No non-tariff barriers, says PM	Prime Minister Datuk Seri Dr Mahathir Mohamad said Malaysia will not introduce non-tariff barriers for its automative industry in 2005 when it must comply with market opening measures under the Asean Free Trade Area (Afta) for the sector.
Global airlines having more flights to KLIA, says Ling	Two more international airlines - Lauda Air and Cathay Pacific Airways - will increase their flight frequency to KL International Airport to seven times weekly effective next Tuesday and Aug 1 respectively. All new airlines flying into the KL International Airport will receive 100% discount in landing and parking charges for five years with immediate effect.
Local tyres and spare parts hit by cheaper imports	Motor trades such as tyre and spare parts dealers nationwide have drastically cut down orders for local products following the influx of imported tyres and parts.
APEC financial regulators share experience with Malaysia	A group of financial regulators from Asia-Pacific Economic Cooperation (Apec) countries were in Kuala Lumpur earlier this month to share their experience in capital market investigation and enforcement with the Securities Commission (SC), local exchanges and the Attorney-General's office.
Malaysia plans to initially use gold within small group	Malaysia plans to initially use the gold dinar as a currency for trading with a small group of countries, in the hope it would slowly gain international acceptance. "We are trying to work it out with three or four countries that we have close ties with,'' said Prime Minister Mahathir Mohamad, who proposed the system last month to reduce the risk of speculation in bilateral trading. Some Islamic countries have proposed using the dinar, which is a gold-backed standard, in international trade instead of the US dollar
Malaysia to host Islamic banking committee	Malaysia has been appointed host country to the newly-created Islamic Financial Services Board (IFSB), an international body that will set standards for Islamic banking and finance.
SC to lead task force on Islamic capital markets	The Securities Commission (SC) has been given a mandate by the executive committee of the International Organisation of Securities Commissions (IOSCO) to lead a task force on Islamic capital markets.
US endorses ISA	US Attorney-General John Ashcroft has "positively endorsed" the significance of the Internal Security Act (ISA) by stating that he understood the relevance, the utilisation and the background of Malaysia having such a law.
Rumsfeld praises Malaysia's efforts	US Defence Secretary Donald Rumsfeld commended Malaysia yesterday for its efforts and co-operation in the war against terrorism. "It is impressive the extent to which Malaysia is co-operating in the war on terror," he told newsmen after meeting Defence Minister Datuk Seri Najib Tun Abdul Razak at the Pentagon
US adopts more positive attitude towards Malaysia	Malaysia's relationship with the United States has taken a significant step forward with the Bush administration adopting a more positive attitude and greater appreciation towards Kuala Lumpur. An American congressman has commended Malaysia for achieving positive results despite pursuing its own prescriptions for development and amid criticisms by global agencies, saying it spoke well of the country's ability to manage its economy. The two country also agree that the effective way to stamp out global terrorism is through military action and simultaneous efforts to address the root causes of the problem
World not doing enough, says Mahathir	The world is not doing enough to defuse the anger and address the causes of serious grievances faced by Muslims, Prime Minister Datuk Seri Dr Mahathir Mohamad said during a dinner held in conjunction with his trip to Washington DC. He also called for the world to be made safe again through greater understanding between people and friendship between them.
PM: Muslims' anger growing	The anger of Muslims in the wake of the Israeli siege in Palestine is greater than it was in the aftermath of last September's aerial attacks on the United States, Datuk Seri Dr Mahathir Mohamad said. If the Middle East crisis was left unresolved, it could lead to more terrorist acts, he said after delivering a keynote address at the Seventh Conference of Ministers of Endowments and Islamic Affairs in Kuala Lumpur.
Worry about definition of terrorism later, ASEAN members told	Asean cannot waste time coming up with a common definition of terrorism and has to act together to check terrorism and find its root causes, Datuk Seri Abdullah Ahmad Badawi said at the opening of the Special Asean Ministerial Meeting on Terrorism in Kuala Lumpur. The Asean countries have agreed to the possibility of working together towards having a common legislation to fight terrorism in the region. The Meeting has also created closer co-operation and greater understanding amongst them.
Indonesia to formulate laws similar to ISA	Indonesia plans to emulate Malaysia by formulating a similar law to the Internal Security Act (ISA) to counter terrorism in the country.
Kuala Lumpur, Manila and Jakarta to boost cooperation	The trilateral agreement on terrorism among Malaysia, the Philippines and Indonesia was signed yesterday to increase co-operation by the three governments to address cross-border incidents and transnational crimes.
Witness protection scheme to combat terrorism	A witness protection scheme will be introduced soon to assist Malaysia's effort to combat terrorism, Minister in the Prime Minister's Department Datuk Seri Dr Rais Yatim said.
Singapore must be willing to compromise	Prime Minister Datuk Seri Dr Mahathir Mohamad said that Malaysia is equally keen to resolve a host of outstanding bilateral issues with Singapore but the republic must be willing to compromise. "We can resolve the issues, but there must be (some) give and take.
Dr. M accepts Pope's invitation	Prime Minister Datuk Seri Dr Mahathir Mohamad has agreed to accept the invitation to meet Pope John Paul II at the Vatican next month. He is expected to meet the head of the Roman Catholic Church at the Vatican in conjunction with his visit to Switzerland and Luxembourg from June 9 to 12. The Palestinian issue will be raised in his meeting with Pope John Paul II at the Vatican City next month as the problem not only affected Muslims but also Christians.