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| This is one of the key reasons why researches are saying the BN federal government is now in no position to present any meaningful fiscal stimulus for Budget 2017 |
This No News Is Bad News blog posting is a selection of three news stories for the convenient reading pleasure of our visitors and readers.
The first story is about 1Malaysia Development Berhad (1MDB) Prime Minister Najib Razak’s Umno-led Barisan Nasional (BN) losing its two-thirds majority in the Johor state legislative assembly.
The second is about how the once Sabah “hero politician” Joseph Pairin Kitingan is still giving the benefit of doubt to two of his top officers who were nabbed by the Malaysian Anti-Corruption Commission (MACC) despite the mammoth seizure of RM114 million in cash, valuables and assets. (Read this for context: http://victorlim2016.blogspot.my/2016/10/maccs-blockbuster-rm114-million-seizure.html)
No News Is Bad News just have one question for Pairin: Can two Sabah Water Department officers afford such wealth?
And the third news is about how and why the BN federal government is now in no position to present any meaningful fiscal stimulus for Budget 2017.
Read on (all stories were re-posted by the Malaysian-banned online news portal Malaysia Chronicle):
"JOHOR TSUNAMI – NAJIB TOTTERS: BN LOSES TWO-THIRDS MAJORITY AS UMNO REPS JOIN DR M’S BERSATU
Politics | October 7, 2016 by | 0 Comments
Johor BN has lost its two-thirds majority in the state assembly after the departure of Jorak assemblyperson Shahruddin Salleh from Umno.
This will be the first time the Umno stronghold is governed without a two-thirds majority, said Johor Amanah chairperson Aminolhuda Hassan.
“The composition of assemblypersons in the Johor state assembly has now changed following the statement from Parti Pribumi Bersatu Malaysia (Bersatu) president Muhyiddin Yassin yesterday about the appointment of Shahruddin as the party’s secretary-general,” he said in a statement today.
He said since Shahruddin, the former Pagoh Umno vice-chief, has joined Bersatu, the latter’s party constitution stipulates that he automatically loses his old party membership.
“This means that assemblypersons from BN Johor has decreased from 38 to 37, while the opposition has increased from 18 to 19 assemblypersons in Johor,” he said.
The main implication is BN can no longer amend Johor’s laws unilaterally.
Aminolhuda predicted that even more Johor assemblypersons from Umno would leave the party before the dissolution of the state assembly.
Meanwhile, he also welcomed Shahruddin to the opposition, saying he hopes they can work together to defeat the Umno/BN government in the upcoming general election.
– MKINI"
"FEARFUL OF LOSING SABAH, NAJIB TARGETS JOSEPH PAIRIN & PBS? SABAH DUO IN CORRUPTION BUST ‘INNOCENT UNTIL PROVEN GUILTY’ – PAIRIN DEFENDS HIS OFFICERS
Politics | October 7, 2016 by | 0 Comments
KOTA KINABALU — Sabah Deputy Chief Minister Tan Sri Joseph Pairin Kitingan said today he is “sad” that two of his top officers were implicated in the one of the country’s largest ever corruption busts.
Pairin who is also state infrastructure development minister said he had learnt from newspaper reports that the duo held by the Malaysian Anti-Corruption Commission (MACC) in the high-profile RM3.3 billion graft investigation are from the Sabah Water Department.
"It is sad to read in the newspapers and to know that two of my top officers have been taken in by the MACC for questioning recently,” he said in a statement.
He added that he has yet to receive any official report on their arrests.
“My permanent secretary and also the state secretary have advised me to wait for an official report or await for future developments to take place before certain procedures will have to be activated.
“In the meantime, we can be comforted by the law which states that a person is presumed innocent until proven otherwise,” he added.
Pairin also said he hoped the two officers can explain themselves “properly” to the MACC so they can return to work peacefully after the investigations end.
The MACC recently arrested two senior officials of an unnamed state agency for alleged corruption.
The national graft fighters have since held a news conference here where they announced and displayed a whopping haul of RM114 million worth in cash, jewellery, land grants and branded goods that they said had been seized from the duo’s properties, bank accounts and safety deposit boxes held by them and their family from around the state capital city.
The total wealth amassed is expected to grow as the MACC enlist professional pawnbrokers to evaluate the value of the items seized later today.
Four people are currently under remand pending the completion of investigations, upon which they may be charged. They are the state department director, 54, his 51-year-old deputy and 55-year-old businessman brother who carries the “Datuk” title, and his accountant, 50.MALAY MAIL"
"OVERSPENT & OUT OF MONEY: NAJIB REGIME CAN NO LONGER AFFORD ‘MEANINGFUL’ FISCAL STIMULUS – RESEARCHERS
Business, Politics | October 7, 2016 by | 0 Comments
PETALING JAYA – The government will not be able to afford any meaningful fiscal stimulus, with revenue lagging targets and expenditure having overshot, HSBC Global Research said in its Asian Economic Quarterly released yesterday.
It said, this had left deficit at a hefty 5.6% of gross domestic product (GDP) for the first half of 2016 and significant expenditure cuts will have to be made in the second half of the year to achieve the government’s 3.1% deficit goal.
HSBC Research opines that it will likely achieve a deficit of 3.2% of GDP for the year. It has a 4% growth in GDP target for 2016.
It also said that the government is likely to face similar fiscal constraints in 2017, with the budget to be tabled on Oct 21 likely to contain more or less the same limited measures for low- and middle-income earners as the 2016 budget.
“The economy’s external vulnerabilities have risen, with the current account surplus much thinner than expected, and the budget deficit under pressure. In the event that oil prices fall further, Malaysia is exposed to the risk of running twin deficits – not the best dynamics in the current global uncertainty,” it said in its report.
In its commentary on the economy, HSBC Research said activity continues to weaken, given limited policy options to boost growth.
HSBC Research said data released since the GDP report does not suggest any imminent turnaround. The Purchasing Manager’s Index showed manufacturing activity contracting in July and August, and an ongoing reduction in employment in the sector – the largest hirer in the country alongside wholesale and retail trade.
July trade data was also weaker than expected, again underscoring soft demand externally and domestically. Trade surplus narrowed to RM1.9 billion (unadjusted), the smallest surplus since October 2014.
“This was in line with our low-end estimate, but both exports and imports contracted more sharply than we expected,” HSBC Research said in the report.
Exports plunged 10% month-on-month (-5.3% year-on-year), giving back nearly all of the gains made in June, while imports fell 9.2% month-on-month (-4.8% year-on-year).
It said amid moderating demand-pull pressures, inflation has stayed below Bank Negara Malaysia’s (BNM) 2-3% comfort range, and is likely to continue to do so for most of the remainder of 2016.
HSBC Research opined however that the most worrying indicator of all is bank lending growth, which has decelerated sharply in recent months. In both month-on-month and year-on-year terms, loan growth is now near to or even lower than the rate during the Global Financial Crisis in 2008-09. The largest sources of drag are property loans (both residential and non-residential) and working capital loans, all of which are now at multi-year lows.
HSBC Research said with activity continuing to slow and loan growth at multi-year lows, there is a pressing need for BNM to deliver meaningful policy accommodation in this easing cycle, and cut the Overnight Policy Rate by another 25bp to 2.75% at the Nov 23 meeting – its last meeting of the year.
“Unfortunately, there is limited scope for rate cuts beyond that. Although low inflation does provide room for easing, overly aggressive cuts could result in capital outflows, which BNM might find challenging to counter with its thin forex reserves,” HSBC Research said.– Sundaily"
He added that he has yet to receive any official report on their arrests.
“My permanent secretary and also the state secretary have advised me to wait for an official report or await for future developments to take place before certain procedures will have to be activated.
“In the meantime, we can be comforted by the law which states that a person is presumed innocent until proven otherwise,” he added.
Pairin also said he hoped the two officers can explain themselves “properly” to the MACC so they can return to work peacefully after the investigations end.
The MACC recently arrested two senior officials of an unnamed state agency for alleged corruption.
The national graft fighters have since held a news conference here where they announced and displayed a whopping haul of RM114 million worth in cash, jewellery, land grants and branded goods that they said had been seized from the duo’s properties, bank accounts and safety deposit boxes held by them and their family from around the state capital city.
The total wealth amassed is expected to grow as the MACC enlist professional pawnbrokers to evaluate the value of the items seized later today.
Four people are currently under remand pending the completion of investigations, upon which they may be charged. They are the state department director, 54, his 51-year-old deputy and 55-year-old businessman brother who carries the “Datuk” title, and his accountant, 50.MALAY MAIL"
"OVERSPENT & OUT OF MONEY: NAJIB REGIME CAN NO LONGER AFFORD ‘MEANINGFUL’ FISCAL STIMULUS – RESEARCHERS
Business, Politics | October 7, 2016 by | 0 Comments
PETALING JAYA – The government will not be able to afford any meaningful fiscal stimulus, with revenue lagging targets and expenditure having overshot, HSBC Global Research said in its Asian Economic Quarterly released yesterday.
It said, this had left deficit at a hefty 5.6% of gross domestic product (GDP) for the first half of 2016 and significant expenditure cuts will have to be made in the second half of the year to achieve the government’s 3.1% deficit goal.
HSBC Research opines that it will likely achieve a deficit of 3.2% of GDP for the year. It has a 4% growth in GDP target for 2016.
It also said that the government is likely to face similar fiscal constraints in 2017, with the budget to be tabled on Oct 21 likely to contain more or less the same limited measures for low- and middle-income earners as the 2016 budget.
“The economy’s external vulnerabilities have risen, with the current account surplus much thinner than expected, and the budget deficit under pressure. In the event that oil prices fall further, Malaysia is exposed to the risk of running twin deficits – not the best dynamics in the current global uncertainty,” it said in its report.
In its commentary on the economy, HSBC Research said activity continues to weaken, given limited policy options to boost growth.
HSBC Research said data released since the GDP report does not suggest any imminent turnaround. The Purchasing Manager’s Index showed manufacturing activity contracting in July and August, and an ongoing reduction in employment in the sector – the largest hirer in the country alongside wholesale and retail trade.
July trade data was also weaker than expected, again underscoring soft demand externally and domestically. Trade surplus narrowed to RM1.9 billion (unadjusted), the smallest surplus since October 2014.
“This was in line with our low-end estimate, but both exports and imports contracted more sharply than we expected,” HSBC Research said in the report.
Exports plunged 10% month-on-month (-5.3% year-on-year), giving back nearly all of the gains made in June, while imports fell 9.2% month-on-month (-4.8% year-on-year).
It said amid moderating demand-pull pressures, inflation has stayed below Bank Negara Malaysia’s (BNM) 2-3% comfort range, and is likely to continue to do so for most of the remainder of 2016.
HSBC Research opined however that the most worrying indicator of all is bank lending growth, which has decelerated sharply in recent months. In both month-on-month and year-on-year terms, loan growth is now near to or even lower than the rate during the Global Financial Crisis in 2008-09. The largest sources of drag are property loans (both residential and non-residential) and working capital loans, all of which are now at multi-year lows.
HSBC Research said with activity continuing to slow and loan growth at multi-year lows, there is a pressing need for BNM to deliver meaningful policy accommodation in this easing cycle, and cut the Overnight Policy Rate by another 25bp to 2.75% at the Nov 23 meeting – its last meeting of the year.
“Unfortunately, there is limited scope for rate cuts beyond that. Although low inflation does provide room for easing, overly aggressive cuts could result in capital outflows, which BNM might find challenging to counter with its thin forex reserves,” HSBC Research said.– Sundaily"
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