Selasa, 30 Julai 2013

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Ringgit rebound seen

Posted: 30 Jul 2013 07:18 PM PDT

Malaysia's ringgit is poised to rebound from a three-year low as the economy's resilience damps concern rising US Treasury yields will prompt overseas investors to dump the nation's bonds, trading patterns show.

The currency has dropped two per cent since June 30 to 3.2255 per dollar, a loss second only to Indonesia's rupiah among 23 emerging-market currencies. The decline pushed the ringgit beyond the limits of the Bollinger band, signaling a reversal may be imminent, data compiled by Bloomberg show. That's the biggest deviation in developing markets. Stochastic oscillators also showed the ringgit is oversold.

Morgan Stanley predicts Malaysia's economic growth and current-account surplus, which is more than twice China's relative to gross domestic product, will help the ringgit catch up with regional peers. The central bank can use its US$138 billion of foreign-exchange reserves to support the currency, according to Bank of America Merrill Lynch. GDP is forecast to grow five per cent this year, after a 5.6 per cent gain in 2012, the median estimate in a Bloomberg survey of 21 analysts shows.

"We might be coming close to the end of the weakness cycle in the ringgit," Rahul Bajoria, a Singapore-based economist at Barclays Plc, said in a July 30 interview. "The current-account surplus still remains quite large, even though it has come off" and domestic demand is driving growth, helping shield the economy from external shocks, he said.

The ringgit's 5.2 per cent loss this year would be its worst annual performance since a 35 per cent plunge in 1997, during the Asian financial crisis. It reached 3.2379 per dollar yesterday in Kuala Lumpur, the weakest level since July 2010.

Fitch Ratings lowered its outlook for Malaysia's A- credit rating to negative from stable yesterday, citing worsening prospects for reducing government debt levels.

The currency slid this month on concern global investors, who owned 33 per cent of Malaysian government bonds in May, the highest proportion in Southeast Asia, will pull funds out as the US outlines plans to rein in monetary stimulus. The Federal Reserve will conclude a two-day policy meeting today in Washington that may shed light on the timing of such a move.

The 10-year Treasury yields climbed 97 basis points, or 0.97 percentage point, to 2.59 per cent since reaching this year's low on May 1. Malaysia's 10-year bond yield rose 70 basis points to 4.06 per cent in that time.

Technical indicators suggest the ringgit's decline may have reached the extreme. At yesterday's close in Kuala Lumpur, the ringgit was 0.1 per cent weaker than the upper limit of the Bollinger Band. The currency breached its normal trading range this week for the first time in a month.

Bollinger Bands, developed by John Bollinger in the 1980s, are used by technical analysts to identify the turning point in an asset's trajectory. The limits represent two standard deviations from the 20-day moving average, implying that the likelihood of a currency moving outside the band is rare.

The "k-line" of stochastics, which measures current price relative to highs and lows, has increased to 83.6, above the 80 threshold deemed as oversold for the ringgit. A dollar-sell signal is confirmed as the k-line crosses below its own moving average, or "d-line," which was at 83.9.

The currency will strengthen 1.8 per cent to 3.17 per dollar by the end of December, according to the median of 27 forecasts compiled by Bloomberg.

BNP Paribas SA predicts rising debt levels will trigger a bond and currency selloff as Prime Minister Datuk Seri Najib Razak presses ahead with a 10-year US$444 billion spending programme aimed at lifting the nation to developed status by 2020. The slowdown in China, Malaysia's second-biggest export market, is also weighing on the country's assets, according to the Paris-based lender.

Malaysia's debt-to-GDP ratio of 53.5 per cent is higher than the 25 per cent in Indonesia, 51 per cent in the Philippines and 43 per cent in Thailand, data compiled by Bloomberg show. It's also approaching the government's 55 per cent limit.

"With China slowing and Fed tapering expected to impact inflows negatively, this will amplify worries over debt sustainability," Singapore-based BNP analysts Yii Hui Wong and Mirza Baig wrote in a July 29 research note. They cut their year-end forecast for the ringgit to 3.25 per dollar from 3.15.

While Malaysia's current-account surplus will narrow to six per cent of GDP this year, from 6.1 per cent in 2012 and 12 per cent in 2011, it's higher than the average 2.8 per cent in Asian countries and 2.4 per cent for China, Bloomberg surveys show.

Malaysia's "fundamentals of a current-account surplus and sustained growth should warrant a correction in the recent weakness in the ringgit," according to a July 25 report from Morgan Stanley analysts led by Hans Redeker, the head of global foreign-exchange strategy in London.

Bank of America strategists including Christy Tan recommended their clients use options to buy the ringgit, saying the central bank will sell foreign reserves to shore up the currency should the decline deepen.

"We believe that Bank Negara Malaysia is well prepared to defend against a ringgit selloff event," Tan wrote in a note to clients on July 22. "In the event of a return in appetite for regional bonds, the ringgit is well positioned to outperform in the region."-- Bloomberg

KL shares open lower in early trade

Posted: 30 Jul 2013 06:56 PM PDT

Shares on Bursa Malaysia extended yesterday's losses to open lower, in early trade, on Wednesday on lack of buying interest in selected heavyweights, dealers said.

At 9.05am, the FTSE Bursa Malaysia KLCI (FBM KLCI) stood at 1,781.90, down 13.18 points.

Losses were mostly seen in key heavyweights like Maybank and Axiata.

Maybank lost 20 sen to RM10.36 while Axiata shed 12 sen to RM6.71, with both counters dragging down the composite index by 4.989 points.

HwangDBS Vickers Research said the local bourse could remain under selling pressure for the time being following its weak underlying performance yesterday.

It said the benchmark FBM KLCI might pull back a bit more from the psychological mark of 1,800 points, possibly retreating towards the immediate support level of 1,785 points ahead.

"This comes as investors will likely play the wait-and-see game pending the outcome of the US Federal Open Market Committee meeting later tonight," said HwangDBS.

On the scoreboard, the Finance index dropped 169.59 points to 16,965.84, the Plantation Index eased 19.88 points to 8,358.92 and the Industrial index fell 10.27 points to 3,036.51.

The FBM Emas Index erased 72.75 points to 12,430.96, the FBM100 Index trimmed 74 points to 12,176.26, the FBM 70 Index decreased 21.51 points to 14,379.17 but the FBM ACE Index rose 11.52 points to 5,058.77.

Gainers outpaced losers 110 to 59, with 120 counters unchanged, 1,310 untraded and 43 others were suspended.

Turnover amounted to 70.939 million shares worth RM38.328 million.

Among actives, Lion Diversified added one sen to 28 sen, Pesona Metro eased two sen to 33 sen while Luster Industries and Tanco Holdings were both flat at 10 sen and 19 sen, respectively.

Sona Petroleum shares and warrants both slipped half-a-sen to 44 sen and 25.5 sen, respectively.

Among heavyweights, Sime Darby added one sen to RM9.50 while CIMB eased seven sen to RM8.08, Petronas Chemicals shed seven sen to RM6.58 and Maxis slipped two sen to RM7.07.-- Bernama

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Whistle-blower or traitor? Bradley Manning to learn fate - CNN

Posted: 30 Jul 2013 08:55 AM PDT

STORY HIGHLIGHTS
  • WikiLeaks founder Julian Assange calls Bradley Manning a hero
  • If found guilty of aiding the enemy, Manning could be sentenced to life in prison
  • He is accused of releasing 750,000 pages of classified documents and videos

(CNN) -- After spending three years in custody, the man accused of the largest leak of classified information in U.S. history will learn Tuesday whether he has been found guilty of aiding the enemy.

A verdict from the judge in the court-martial of Pfc. Bradley Manning will be announced at 1 p.m. ET Tuesday, according to a spokeswoman for the military district of Washington.

If found guilty on the aiding the enemy charge, Manning could be sentenced to life in prison. He has pleaded guilty to nearly a dozen lesser charges that carry a sentence of up to 20 years behind bars.

Whether Manning is a whistle-blower or a traitor who betrayed his country has been hotly debated.

Read more: What do Manning's actions mean? Depends who is talking

Some did it for the money, some did it for idealism, others didn't do it at all. The U.S. has seen a number of high profile leak scandals including the Pentagon Papers during the administration of President Richard Nixon. Click through to see more high-profile intelligence leaking cases.Some did it for the money, some did it for idealism, others didn't do it at all. The U.S. has seen a number of high profile leak scandals including the Pentagon Papers during the administration of President Richard Nixon. Click through to see more high-profile intelligence leaking cases.
Sharing secrets: U.S. intelligence leaks
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Former intelligence worker Edward Snowden, 29, revealed himself as the source of documents outlining a massive effort by the NSA to track cell phone calls and monitor the e-mail and Internet traffic of virtually all Americans. He says he just wanted the public to know what the government was doing. "Even if you're not doing anything wrong, you're being watched and recorded," he said. While he has not been charged, the FBI is conducting an investigation into the leaks.Former intelligence worker Edward Snowden, 29, revealed himself as the source of documents outlining a massive effort by the NSA to track cell phone calls and monitor the e-mail and Internet traffic of virtually all Americans. He says he just wanted the public to know what the government was doing. "Even if you're not doing anything wrong, you're being watched and recorded," he said. While he has not been charged, the FBI is conducting an investigation into the leaks.
Notable leakers and whistle-blowers
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Authorities have accused Manning of delivering three quarters of a million pages of classified documents and videos to the secret-sharing site WikiLeaks, which has never confirmed the soldier was the source of its information. The material covered numerous aspects of U.S. military strategy in Iraq, gave what some called a ground view of events in the Afghanistan war and revealed the inner workings of U.S. State Department diplomacy in leaked cables.

When he entered his guilty pleas on the lesser charges earlier this year, Manning spent more than an hour in court reading a statement about why he leaked the information.

He said the information he passed on "upset" or "disturbed" him, but there was nothing he thought would harm the United States if it became public. Manning said he thought the documents were old and the situations they referred to had changed or ended.

Whistle-blower or traitor?

"I believed if the public was aware of the data, it would start a public debate of the wars," he said during his court-martial. He said he was "depressed about the situation there," meaning Iraq, where he was stationed as an intelligence analyst.

He first tried to give the information to The Washington Post, but a reporter there didn't seem like she took him seriously, he said. He left a voice mail for the New York Times and sent an e-mail to the newspaper but, he claims, he didn't hear back. So he decided to give the information to WikiLeaks.

After WikiLeaks published a trove of documents related to the Afghanistan war in 2010, the site became an international sensation, as did its chief, Julian Assange.

"We call those types of people that are willing to risk ... being a martyr for all the rest of us, we call those people heroes," Assange told CNN's Jake Tapper. "Bradley Manning is a hero."

Assange described the case against Manning, specifically the aiding the enemy charge, as a serious attack against investigative journalism.

"It will be the end, essentially, of national security journalism in the United States," he said on the eve of the verdict.

Assange spoke from the Ecuadorean Embassy in London. He sought refuge there to avoid extradition to Sweden, where he is wanted for questioning over allegations of sex crimes. Assange has said he thinks the claims against him are Washington's way of getting him arrested so that he can be extradited to the United States to face charges.

CNN's Larry Shaughnessy and Dana Ford contributed to this report.

Obama wants to link corporate tax reform, jobs spending - Washington Post

Posted: 30 Jul 2013 08:09 AM PDT

Obama will unveil his proposal in Chattanooga, Tenn., as part of his summer campaign to highlight his economic message and frame the fall debate over the federal budget. The president is searching for ways to ease Republican opposition to his economic priorities, such as boosting hiring through spending on roads, bridges and other infrastructure.

The proposal attempts to capitalize on Republicans' long-held desire to reduce corporate tax rates, which they say put U.S. companies in an uncompetitive position globally. Obama says he wants to overhaul the tax code and use some of the new federal revenue generated — likely by taxing foreign profits of U.S. corporations — to pay for domestic initiatives. Obama has proposed spending $50 billion on infrastructure in the next year.

"The president will call on Washington to work on a grand bargain focused on middle-class jobs by pairing reform of the business tax code with a significant investment in middle-class jobs," said Dan Pfeiffer, a senior adviser.

In principle, an overhaul of the corporate tax code could offer room for compromise. The White House and Republicans agree that corporate tax breaks should be reduced and that the resulting tax revenues should be used to lower corporate tax rates.

The administration and key congressional Republicans, such as House Ways and Means Committee Chairman Dave Camp (Mich.), also agree that U.S. companies that have amassed profits overseas should pay a tax or fee to repatriate those funds.

But that is where agreement has largely ended — and, on its face, Obama's proposal would not change that dynamic. In the past, the two sides have disagreed on what the new corporate tax rate should be, as well as on how to tax foreign profits in the future.

And Republicans have rejected the idea of using new revenue for spending of the sort Obama wants.

House Republicans, who said they learned of the offer through news reports Tuesday morning, rejected the proposal and dismissed the notion that it represented a new concession.

"The president has always supported corporate tax reform. Republicans want to help families and small businesses, too," said Michael Steel, a spokesman for House Speaker John A. Boehner (Ohio).

"This proposal allows President Obama to support President Obama's position on taxes and President Obama's position on spending, while leaving small businesses and American families behind."

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