You are on page 1of 1

14 theSun | MONDAY JUNE 29 2009

business

‘World financial system
not out of woods yet’
BASEL (Switzerland): The head of the However, he also highlighted the those from the Group of 20 major devel-
market summary
international body tasked with restoring unfinished restructuring of banks and oped and developing countries, as well JUNE 26, 2009
stability to the world’s financial system the fragile credit channels among the as Spain, Switzerland and the European INDICES CHANGE
said on Saturday that the system had “uncertainties”. Commission – in all involving at least
improved significantly but was “not out These features have be restored in 24 states. FBMEMAS 7211.46 12.82
COMPOSITE 1075.77 1.66
of the woods yet”. order to “sustain the recovery”. The G20 agreed in April in London INDUSTRIAL 2346.57 4.31
“We are more or less back at what “When the time will come, we’ll that the FSB should look at new rules CONSUMER PROD 319.74 -0.36
we were before Lehman, but we are have to try to coordinate our exit strate- for ensuring stability in the global INDUSTRIAL PROD 85.01 -0.17
not back to before the crisis,” Financial gies,” Draghi told journalists. financial system so as to avoid a repeat All hail to CONSTRUCTION 206.62 1.21
Stability Board chair and Italian central But he emphasised that the financial of the slump. kindergarten TRADING/SERVICES 143.26 0.33
bank chief Mario Draghi said. and economic climate was still too frag- The meeting in Basel set in motion FINANCE 8523.17 -4.68
He was referring to the sudden ile to unwind the cuts in interest rates, a range of reviews of the international
queens PROPERTIES 720.93 4.79
collapse of US banking giant Lehman stimulus plans and other measures financial system in coordination with pg 17 PLANTATION 5396.00 -2.17
MINING 277.62 -2.03
Brothers last September, which plunged taken to combat the slump and credit other specialist oversight bodies, tack- TECHNOLOGY 14.44 0.05
financial markets and the banking and squeeze. ling bank capital requirements, simpli- FBMSHA 7451.99 6.68
credit system into turmoil. “You have to have the bank system fied accounting, and national regulation FBM2BRD 4798.80 3.08
“An improvement yes, out of the repaired before you run a tight monetary among others.
woods, not yet,” he added after the policy,” the FSB chief pointed out. “Much of this will come to frui- TURNOVER VALUE
FSB’s inaugural meeting, underlining The FSB is meant to a broadened tion before the end of this year,” said 1.203bil RM1.247bil
renewed confidence. and strengthened Financial Stability Draghi.
Draghi pointed to two “positive Forum, bringing together central banks, In several instances the FSB will be
signs”: the way US banks in particular
had managed to raise US$10 billion
the IMF, World Bank, national regula-
tors and governments, tasked with
seeking greater consistency between
the three dominant sets of regulations
Share prices likely to trend
(RM35 billion) in private capital re- permanent oversight of the financial in the international financial world, in higher this week
cently, and the strength of corporate system. the European Union, Japan and the
bond issuance. It is now expanded to include all United States. – AFP SHARE prices on Bursa Malaysia are expected to
trend higher this week with developments at the
Invest Malaysia 2009 conference likely to provide

Aussie banks defy downturn the catalysts.
An analyst said investors were looking forward
to announcements on incentives to attract foreign

at cost to customers: Analysts investments and the liberalisation measures for the
capital market during the conference.
Invest Malaysia 2009, which will be held on
MELBOURNE: Australia’s banks are thriving eight banks in the world rated AA- by credit customers and therefore remain strong in the tomorrow and Wednesday, is hosted by Bursa
as their global peers struggle but stand accused agencies. face of weak global markets,” Choice senior Malaysia and CIMB Investment Bank.
of “gouging” customers to keep themselves in “Not a bad result when our country is just policy analyst Elissa Freeman said. Prime Mnister Datuk Seri Najib Abdul Razak will
the black, according to analysts. two percent of the world economy,” he said. A report from Fujitsu Consulting earlier deliver a keynote address.
Treasurer Wayne Swan has cited the “Forecasters and commentators agree that this year found that bank fees levied on Aus- During the week just-ended, the market tracked
relative health of the banking sector as one the stability and security of Australia’s bank- tralian households were 22% higher than developments in regional bourses, as share
of the reasons why Australia has handled the ing system have played an important part in those in Britain and 11% more than in the prices rebounded from a two-day losing streak on
financial crisis better than any other advanced our economy’s resilience.” United States. Wednesday on bargain hunting.
economy and so far avoided a recession. The reason the banks’ have withstood The Reserve Bank estimated that Austral- It continued its uptrend on Thursday with senti-
“Major financial institutions, some of which the downturn so well is because they did not ian customers paid US$4.85 billion (RM17 ment boosted by Federal Open Market Commit-
withstood world wars and the Great Depres- make themselves vulnerable by handing out billion) in bank fees in 2008, up 8% on the tee’s decision to leave key US lending rate at a low
sion, have either collapsed or been bailed out risky loans during the good times, according previous year. of zero to 0.25%. Shares finished mostly higher on
... (but) our banking sector is among the most to the Reserve Bank of Australia. Freeman said competition in the sector Friday on profit-taking.
stable in the world,” he said recently. “The banking system is soundly capital- was set to deteriorate further as the big banks On a Friday-to-Friday basis, the KLCI closed the
The country’s ‘Big Four’ banks – Common- ised, it has only limited exposure to sub-prime swallowed up smaller rivals weakened by the week 16.27 points higher at 1,075.77 compared
wealth, Westpac, ANZ and NAB – posted a related assets and it continues to record strong financial crisis. with 1,059.5 a week earlier. The Finance Index
combined total of A$8.3 billion (RM24 billion) profitability and has low levels of problem She said Westpac’s recent merger with St. increased by 29.47 points to 8,523.17 from 8,493.7
in interim profits in recent months. loans,” the central bank said. George and the Commonwealth’s takeover previously and Plantation Index increased by 67.37
While they all reported writedowns due to But consumer advocacy group Choice of BankWest showed the Big Four would points to 5,396 from 5,328.63 last Friday. The
bad debts, there has been no need in Australia points to another reason for the banks’ health, emerge from the downturn more dominant Industrial Index, however, declined 7.48 points to
for the huge government bailouts needed in saying lack of competition has allowed them than when they entered it. 2,346.57 from 2,354.05 previously. The FBMEmas
many other countries to keep banks afloat. to charge much higher fees than overseas “The global financial crisis has seen com- increased 112.93 points to 7,211.46 from 7,098.53
In fact, Australian Bankers Association counterparts. petition in retail banking sacrificed further last Friday and FBM30 increased 110.08 points to
chief executive David Bell points out that “It is the abysmal lack of competition that in order to deliver stability in the banking 6,905.91 from 6,795.83 previously. – Bernama
Australia’s big banks account for four of the has allowed the Australian banks to gouge system,” she said. – AFP

the Asian Financial Crisis of 1997 All models will sell for between 6.3 business leaders said the domestic when the product was purchased,”
meant Hongkong had not suffered million rupees (RM458,500) and 9.2 economy’s immediate trend was the documents said.
a breakdown in its financial system. million rupees (RM669,500) at a new holding steady while 27% said it was GM filed for bankruptcy protec-
briefs – AFP purpose-built showroom in Mumbai.
– AFP
worsening. – AFP tion in early June and under a rapid
restructuring plan, the US govern-
Jaguar, Land Rover ment would become the company’s
GM takes responsibility principal shareholder with a 60.8%
enter Indian market Poll: Optimism grows
HK yet to emerge from MUMBAI: India’s Tata Motors
for vehicles it built stake.
among Japanese execs WASHINGTON: Troubled US
Canada would have 11.7%. A
financial crisis: Tsang yesterday announced the entry of
TOKYO: Japan’s business leaders automaker GM has accepted to
United Auto Workers trust fund
luxury British marques Jaguar and would hold 17.5%. – AFP
HONGKONG: Hongkong has still to Land Rover into India, but insisted have become more optimistic about maintain its legal responsibility for
emerge from the effects of the global there were no plans to assemble economic recovery over the past three vehicles it has built in the past, ac-
economic slowdown despite early them in the country for the time months, a quarterly newspaper poll cording to legal documents that ap- German banks under
signs of returning stability, the city’s being. said yesterday. peared Saturday on the Internet. fire for credit policies
chief executive Donald Tsang said Six models – three each from But they also believe that full re- In the documents submitted FRANKFURT: German banks are fac-
yesterday. Jaguar and Land Rover – will be sold covery is not likely until some time in by the company to a bankruptcy ing a firestorm of criticism from the
Tsang said that big challenges from today in India, which is among 2010, the Nikkei business daily said, court in New York, GM argues the government and industry federations
remained for the city, whose key the world’s fastest-growing global as recent official data began showing law does not compel it to assume that accuse them of threatening small
industries of finance and exports have automobile markets. signs of gradual economic improve- responsibility for cars and trucks businesses with their tight-fisted credit
been hit hard by the crisis. “This launch ushers in a new ment. sold by the old company. policies.
“There is no doubt we have yet breed of vehicles in India, which had In a survey this month roughly half “Notwithstanding the forego- More than 16,600 small and me-
to emerge from the impact of the been disconnected with consumers of the presidents and chairmen of 137 ing, to alleviate certain concerns dium-sized companies in Germany
financial tsunami,” he said on local here for some years,” Ratan Tata, major companies said they thought that have been raised on behalf of failed in the first half of the year, 14%
broadcaster RTHK’s weekly Letter to chairman of the Tata Group, told a that the domestic economy had im- consumers as to future products more than in the same period of 2008,
Hongkong. news conference in Mumbai. proved or showed signs of recovery liability claims” the post-bank- the association Creditreform has
“While recent statistics have shown The Jaguar range includes the XF, when compared with six months ago. ruptcy GM “will expressly assume estimated.
some signs of economic stability XFR and XKR models while the Land In the previous survey, taken in all products liability claims arising The bankruptcies affected 250,000
returning, there are still many uncer- Rover brands coming to India will March, only 0.7% of poll participants from accidents or other discrete jobs and Creditreform has warned that
tainties in the global market.” be Rover Discovery 3, Range Rover said so, the business daily said. incidents arising from the opera- a total of 540,000 jobs could be elimi-
He said reforms put in place after Sport and the basic Range Rover. In the Nikkei survey, 63.5% of tion of GM vehicles ... regardless of nated by the end of the year. – AFP