Oil prices drop in Asia on Saudi output comments

World oil prices fell in Asian trade Tuesday amid signs that OPEC will maintain production levels when it meets later in the day, analysts said.
New York's main contract, light sweet crude for October delivery, fell 1.15 dollars to 105.19 US dollars per barrel from 106.34 at the close of floor trading Monday in the US.
Brent North Sea crude for October delivery fell 1.17 dollars to 102.27 dollars.
The Organisation of the Petroleum Exporting Countries (OPEC) is due to meet later Tuesday in Vienna to discuss production targets, and the latest comments from its de facto leader, Saudi Arabia, suggest unchanged output levels.
"The market is fairly well balanced," said Saudi Oil Minister Ali al-Nuaimi, as he arrived in Vienna Tuesday for the meeting. "Inventories are in a healthy position, everything is in balance."
Experts said the comments boosted expectations of oil price weakness.
"If the market is coming to a view that OPEC will not be doing anything at all, then I think you might see oil prices lower and I think that is what's happening right now," said Commonwealth Bank of Australia strategist David Moore.
Other OPEC members, including Kuwait and the United Arab Emirates, have called for no change in output levels. But Algeria, Iran, Venezuela and Libya have raised fears of oversupply and suggested the need for a cut.
OPEC President and Algerian Energy Minister Chakib Khelil had said on Monday that a production cut by the 13-member group, which pumps about 40 percent of world oil, would be discussed.
"Everybody agrees that we will have an oversupply problem of between half a million and one-and-a-half million (barrels per day) by early next year," he said as he arrived in Vienna.
OPEC is believed to be producing about a million barrels per day (bpd) more than its official ceiling of 29.67 million bpd, with Saudi Arabia accounting for most of the excess.
Some analysts believe Saudi Arabia would be happy to see prices fall below 100 dollars a barrel to help stimulate economic growth.
Oil prices have fallen 28 percent since reaching record levels of above 147 dollars in July, hit by worries of waning energy demand as a world economic slowdown takes its toll. -www.news.my.msn.com

New investment wave to hit Malaysia

Up to RM4 billion of foreign direct investment (FDI) is expected to flow into the country over the next six months as more investors see Malaysia as a good investment destination amid concern over a global economic slowdown.Its transparent laws on land matters, wide use of the English language and value-for-money destination make the country attractive, an industry observer said.Business Times understands that the inflow of FDI will come from the Middle East, South Korea, Hong Kong, China and Taiwan, and is for land acquisitions in the growth corridors, including the Klang Valley.The deals are believed to be brokered by a local property firm with international interest.
"These new foreign investments could translate into a gross development value (GDV) exceeding RM15 billion," a source close to the deals told Business Times.It is learnt that a Korean developer has acquired 0.4ha in Jalan Kia Peng, Kuala Lumpur, for RM2,500 per sq ft to build a luxury one-block residence for around RM1 billion."The land was acquired at a record price. The residences will be a stunning landmark within the Kuala Lumpur City Centre enclave and may break the record for prices of high-end products."The developer aims to sell the units to Koreans and locals," the source said.The Iskandar Malaysia growth corridor in Johor, which has attracted RM33 billion in investments, or 70 per cent of the Johor state government's target of RM47 billion to date, is also experiencing a new wave of investments.The source said that more investments were expected to come from the United Arab Emirates, Qatar and Bahrain as investors look for prime properties like condominiums and offices in south Johor and in KLCC and Mont' Kiara, Kuala Lumpur.Companies from the Middle East - such as Kuwait Finance House, Aldar Properties, Mubadala Development Co, Millennium Development Co, Damac Properties and Limitless Dubai - are already investing in Iskandar Malaysia.Sabah, which is experiencing a mini-boom after the launch of the Sabah Development Corridor earlier this year, is attracting investors from South Korea, Hong Kong and Taiwan.Some RM500 million worth of investment is expected to be made by the first quarter of next year for resort and the broader property development," the source added.-www.btimes.com.my

Duty Slash Will Increase Agriculture Productivity

KUALA LUMPUR, Aug 30 (Bernama)- The abolishment of import duty on fertilizers and pesticides, as announced in the 2009 Budget, will contribute towards higher productivity at the farm and lower the price of agriculture products, says University Malaya Faculty of Economics & Administration Prof Dr Pazim Fadzim Othman.Prime Minister Datuk Seri Abdullah Ahmad Badawi, when tabling the 2009 Budget in the Dewan Rakyat yesterday said the 5-25 percent import duty on fertilizers and pesticides will be scrapped."Our research on 600 odd farmers shows that only a small percent produce nine tonnes per hectare, compared with four to five tonnes per hectare (by the rest) because they use less fertilizer," he said at the 2009 Post-Budget Dialogue here, Saturday.The programme was jointly organised by Malaysian Economic Association and Standard Chartered Bank Malaysia Bhd.Citing the high price of fertilizers and pesticides as the cause for the low productivity, Pazim said, "Everybody must understand that pesticides and fertilizers are not produced in the country and it must be imported."The import duty slash will encourage farmers to use more fertilizers and increase productivity and this will lower food price, he said.Pazim said the government's measures towards exploration of new areas for cultivation, optimisation of the usage of available resources, encouragement of private sector participation and investment were all good moves towards the goal of increasing domestic food production.The government is projecting an annual growth of 6.2 percent for the food crop sub-sector for the rest of the Ninth Malaysia Plan (2006 to 2010).

Rate move to consider Malaysia's best interest: Zeti

WHATEVER decision Bank Negara Malaysia makes today on the direction of interest rates will be in the country's best interest, its governor Tan Sri Dr Zeti Akhtar Aziz said.Bank Negara's monetary policy committee meets today to decide on the Overnight Policy Rate, which effectively determines interest rates.Economists have said that the central bank is under pressure to raise rates in response to the sharp increase in inflation to a 26-year high of 7.7 per cent last month, from 3.8 per cent in May.Zeti told reporters in Kuala Lumpur yesterday that Bank Negara was monitoring the situation to gauge the impact of rising inflation.
She also said that the ringgit cannot be used as a monetary tool to stem inflationary pressures as its exchange rate is not static.The ringgit is a mechanism to facilitate international transactions, both trade and financial, Zeti said-www.btimes.com.my

Takaful Malaysia eyes 33% share of govt loan scheme

SYARIKAT Takaful Malaysia Bhd (STMB) aims to capture one-third market share of the government housing loan scheme for the financial year ending June 30 2009.STMB group managing director Hassan Kamil said up to June 30 2008, STMB had collected about RM25 million to RM30 million in premium for the scheme, for a 20 per cent share. Yesterday, the company opened its new Treasury Business Centre to cater for the government employees who took housing loan under the scheme at the Ministry of Finance, Putrajaya.To widen its reach to customers, Hassan said, the company is undertaking an initiative to set up a takaful "desk" within Bank Islam's branches nationwide.
STMB will also sell Bank Islam products in all their branches. STMB and Bank Islam are sister companies under BIMB Holdings Bhd.STMB hopes to finalise the consolidation of its branches with those of Bank Islam Malaysia Bhd's by year-end.

Malaysia Has Potential To Be Herbal Hub

KUALA LUMPUR, Aug 21 (Bernama) - Malaysia has the potential to achieve its aspiration of becoming a global herbal hub as more people are turning away from modern medicines, says Minister of Science, Technology and Innovations, Datuk Dr Maximus Johnity Ongkili.Therefore, local herbal entrepreneurs must ensure good practices in business and produce safe and clean natural products in accordance with international health safety regulations and standards.This will be important for Malaysia to achieve greater success in the medicinal plants, health and herbal product sector.It will also enhance its image as a catalyst for providing good business opportunity for the global communities, he said in his speech at the soft launch of Herbal World 2008 here, Thursday.His speech was read by the ministry's director general, Prof Datuk Dr Mohamed Isa Abd Majid.Ongkili said the development of the Malaysian herbal industry has undergone phenomenal changes and has grown by leaps and bounds over the past few years. In terms of herbal products registered in Malaysia with the Drug Control Authority, the number has increased to more than 10,000 products at present from only 339 products in 1995."As Malaysian-made health and herbal products are fast gaining international recognition, local companies and entrepreneurs must take bold measures to willingly invest and develop their brand in order to remain competitive," he said.Meanwhile, the inaugural Herbal World 2008 to be held in November this year is being organised by Cynrix Innovations Sdn Bhd and is expected to pull in over 1,000 participants with 250 exhibitors from 30 countries and 23 renowned international speakers in respective fields.Cynrix Innovations chairman, Tan Sri Dr Sulaiman Daud said he also expects the participation of many international and regional trade bodies and United Nations organisations at the event.It is estimated that the global herbal products market has been growing 15 percent annually with its market size expected to swell to US$5 trillion by 2050.Currently, the medicinal plants market worldwide is worth US$62 billion.

Slower economic growth to cool inflation:Malaysia

MALAYSIA'S slowing economic growth and recent falls in the prices of commodities will help cool inflation, especially in the second half of 2009, Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz said."The moderation in growth, as we see it, will have some dampening effect on inflation," Zeti told reporters yesterday on the sidelines of the Malaysian Islamic Finance Issuers and Investors Forum 2008.Malaysia's inflation rate stood at a 26-year high of 7.7 per cent in June after a fuel price increase led to a general rise in prices of goods and services.Zeti said the adjustment in prices was just the first-round effect.
"What we need to monitor is the second-round effect. With the moderation in growth, we expect that inflation will moderate next year, particularly in the second half," she said.Zeti stressed that while there would be a moderation in growth, the country must avoid slipping into a fundamental economic slowdown.A fundamental economic slowdown is said to occur when there is "increased unemployment", she explained.On the ringgit, Zeti said its recent fall reflected the movements of other major currencies worldwide."This is just an inter-national development and we will monitor it closely," she said.On whether Bank Negara has been intervening in the foreign exchange market, as has been speculated by dealers, Zeti said that any intervention it undertakes is to maintain orderly market conditions."We will not be intervening to affect the underlying trend of the currency," she stressed.The ringgit fell against the US dollar to 3.3160/3180 yesterday from last Friday's closing of 3.3000/3030. On issues pertaining to Malayan Banking Bhd's purchase of an Indonesian bank, Zeti declined comment. -www.btimes.com.my