Malaysia records highest total trade (by NST)

KUALA LUMPUR: Malaysia recorded its highest total trade of RM1.3 trillion last year, up 8.7 per cent from 2010, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed.

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He projected a growth of between five and six per cent for Malaysia's total trade this year.

The World Competitiveness Yearbook 2011 Report by the Institute for Management Development ranked Malaysia among the top five countries in terms of international trade after Singapore and Hong Kong, surpassing the United States of America, Switzerland, Australia, Canada and the United Kingdom.

Mustapa said exports expanded 8.7 per cent to RM694.55 billion last year while imports grew 8.6 per cent to RM574.23 billion.

Trade surplus rose 9.4 per cent to RM120 billion.

"This was the 14th consecutive year of trade surplus recorded by the country since 1998," Mustapa said.

He said rising demand for production inputs and consumer goods from Asian markets boosted this sector's contribution by 71.3 per cent to Malaysia's total exports.

Exports to Asia increased 11.2 per cent to RM495.19 billion in 2011.

"Within a span of five years, the share of exports to Asia grew 8 per cent from 63 per cent in 2007, in tandem with the region becoming the new economic growth centre of the world," Mustapa said here today when announcing Malaysia's Trade Performance for last year.

Manufactured goods were again the mainstay, accounting for 67.7 per cent share or RM470.3 billion of total exports, he said.

Mustapa also said China, for the first time, emerged as Malaysia's largest export market in 2011, with exports to the country growing 13.9 per cent to RM91.25 billion.

About 70 per cent of exports to China were manufactured goods and they mainly comprised chemicals & chemical products, rubber products, electrical and electronic products, manufactures of metal, processed food, and petroleum products.

Meanwhile, exports to Asean accounted for 25 per cent of the country's offtake with 5.8 per cent growth recorded in 2011 to RM171.54 billion.

Despite the uncertainties in the Eurozone, Malaysia's exports to all major markets in the European Union (EU), excluding the Netherlands and the United Kingdom, recorded an increase last year.

Exports to EU grew 4.7 per cent to RM71.95 billion with palm oil accounting for the largest export, recording an increase of 31 per cent to RM6.88 billion.

Mustapa said major growth markets in 2011 were Indonesia, Nigeria, Bangladesh, Saudi Arabia, Belgium and Germany where exports expanded by more than RM1 billion for each country.
-- BERNAMA

Read more: Malaysia records highest total trade - Top News - New Straits Times http://www.nst.com.my/top-news/malaysia-records-highest-total-trade-1.44293?localLinksEnabled=false#ixzz1lsMvpTM8

Four EU nations ban short-selling on banking stocks

France, Italy, Spain and Belgium have banned short-selling on the shares of banks and other financial companies.



It follows sharp gains and losses in bank stocks in recent days, especially in France, on fears about their exposure to eurozone government debt.

Societe Generale has been the worst affected by the volatility, being forced on Wednesday to deny that its financial stability was at risk.


SEE FULL ARTICLE FROM THE BBC BY CLICK ON THIS LINK

RM1b wipeout due to downgrades, 12 April 2011, The Star

Article with BPA Malaysia providing the information.

RM1b wipeout due to downgrades, 12 April 2011, The Star

Good Time for Corporates to Issue Bonds - The StarBiz, Page 1 - 04 April 2011

This was the article that came out in today's StarBiz on page 1. The interview took place last Friday.
Good Time for Corporates to Issue Bonds - The StarBiz, Page 1 - 04 April 2011

The Flow of a Bond Issuance - Part 3 - Secondary Level - Trading process and market conventions

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Once issued at the primary level, investors are free to sell it down at the secondary market level. Here is where the bond market trading (as we know it) happens.

Government securities and other scripless debt instruments, including sukuks, are traded in the secondary or "over-the-counter" (“OTC”) market - either via a money broker, direct dealing through telephone or via the Electronic Broking System (“EBS”). Principal Dealers are committed to continuously providing 2-way prices for MGS. Every morning, Principal Dealers will submit and advertise their indicative bids and offers on all benchmark securities in the BIDS system. Financial institutions that are Non-Principal Dealers may also choose to become market makers by quoting 2-way prices in the BIDS system. All trading done via the OTC market must be captured by the BIDS system, where the sellers of securities will key in the deal and the buyers will confirm the same within a stipulated 10-minute cut-off time from trade execution.

Normal business hours for a regular Government securities trade is for standard settlement or value spot, i.e. 2 business days (T+2) settlement, from 9.00 am to 4.30 pm Mondays to Fridays, excluding holidays. Government securities can also be traded based on value today, value tomorrow or value forward.

All trades are settled on a DvP basis, although free-of-payment (“FoP”) settlement is also available where necessary. As the securities are scripless, ownership and transfer of Government securities are reflected as book entries in the ADIs’ custody accounts with BNM in RENTAS. Non-RENTAS members, such as institutional investors and other financial institutions, can transact scripless securities via their ADIs. Cash payments of coupons and redemption proceeds will be passed to the investors via their respective ADIs.

Payment Settlement

Investors can purchase debt securities in the primary market by submitting bids to Principal Dealers, which are all members of FAST. In 2005, FAST was upgraded to a web-based application, thus allowing better dissemination of information and transparency vis-à-vis primary-market activities.

 Meanwhile, the settlement of primary and secondary market transactions for Government securities and unlisted PDS - including sukuks - take place through the Scripless Securities Trading System (“SSTS”), which is part of RENTAS. Established in 1999 by BNM, the payment system comprises the Inter-bank Funds-Transfer System ( or IFTS), which deals with large-value fund transfers, and the SSTS, which allows the book-entry settlement and record-keeping of holdings of scripless debt securities. A sale or purchase of securities from one party to another involves a book entry and intra-day settlement of funds in the cash-settlement account maintained with BNM. The RENTAS system, which has straight-through-processing (or STP) capability, will process, transfer and settle inter-bank funds and scripless transactions simultaneously, in real time. The RENTAS system is a DvP system, i.e. securities and funds are settled throughout the day.

For custody, the securities issued are in the form of Master Certificates and lodged by the issuer directly with BNM, as the authorised depository for custody. BNM will hold the Master Certificate on behalf of all the holders and their scripless securities accounts, for the purpose of trading and transfers. For non-RENTAS members, the function of recording the holdings and transactions is undertaken by ADIs, which maintain aggregate cash and securities holdings accounts with BNM. The ADIs maintain a separate account for every holder that is their customer.

Market Convention

Long-dated Government securities are traded on a “clean price” basis, but settled on a “dirty price” basis that includes accrued interest or dividends. Treasury bills are traded on a “discount yield” basis and quoted in maturity bands of 1 to 10, depending on the number of days to maturity. Treasury bills that fall under the same maturity bands are equally acceptable for delivery for any band-based quotations. Prices and discount yields are typically quoted up to 2 decimal places for all transactions. The standard settlement period is T+2, although trades can also be settled on the same day or the next day, or forward settlement of usually not more than T+5. The standard market lot per transaction between market participants is RM5 million. Odd-lot amounts of less than RM5 million are also traded, but not as frequently and at potentially wider bid-offer spreads under normal market conditions.

Coupons on individual Government securities are usually paid semi-annually, and the day count is actual/actual. At present, there is no standard coupon-payment date. Coupons are paid at semi-annual intervals, determined backwards from the maturity date of the issue. MGS and GIIs are typically issued in a precise number of years, with the maturity date being the exact date of the issue’s anniversary. As such, there is naturally no odd-first or odd-last coupon period, with only a few exceptions. A business day is defined as any working day from Monday to Friday in the Federal Territory of Kuala Lumpur, excluding any day which is a public holiday or bank holiday.