Wednesday October 8, 2008 MYT 12:16:31 PM
NEW YORK: Gold prices kept rising Tuesday, approaching US$900 an ounce after another day of turmoil in financial markets encouraged buying of safe-haven assets. Silver also rose.
Investors remained skittish even after the Federal Reserve announced it would ramp up emergency efforts to clear obstructed credit markets and revive the economy.
The central bank said it would buy massive amounts of short-term commercial debt and in a speech Tuesday, Fed Chairman Ben Bernanke hinted that it might cut interests rates as well.
The measures, which follow last Friday's approval of a $700 billion financial bailout, failed to console Wall Street.
The Dow Jones industrials fell more than 500 points.
With few safe places to put money, investors flocked to gold.
The December contract jumped $15.80 to settle at $882 an ounce on the New York Mercantile Exchange, after earlier rising as high as $893.70.
On Monday, gold shot up $33 to $866.2 an ounce.
Gold, long considered an attractive investment during rough economic times, has seen a resurgence of late as the spreading credit crisis weighs down equity markets across the globe.
"This bailout plan has not been the magic bullet that many people hoped it would, so gold is catching some of the safe-haven bid from that,'' said Matt Zeman, head trader at LaSalle Futures in Chicago.
December silver rose 9.5 cents to settle at $11.38 an ounce on the Nymex, while December copper fell 15.55 cents to settle at $2.5345 a pound.
A slightly weaker dollar Tuesday also supported gold.
A falling greenback encourages investors to buy precious metals as a hedge against inflation or weakness in the U.S. currency.
In energy markets, oil prices rebounded from the previous day's big drop as investors halted selling to see whether the economic bailout can gain traction and stem a widening global downturn.
Light, sweet crude for November delivery rose $2.25 to settle at $90.06 a barrel on the Nymex, after earlier trading as high as $93.02.
In other Nymex trading, heating oil rose 3.17 cents to settle at $2.5057 a gallon, while gasoline futures rose less than half a penny to settle at $2.0628.
In agriculture trading, major grain prices traded mixed on the Chicago Board of Trade.
Wheat for December delivery rose 8 cents to settle at $6.0325 a bushel, while December corn fell 7 cents to settle at $4.17 a bushel.
November soybeans added 4 cents to settle at $9.26 a bushel.
http://thestar.com.my/news/story.asp?file=/2008/10/8/business/20081008083918&sec=business
Thursday, October 9, 2008
Local insurers may get hurt if crisis widens
Wednesday October 8, 2008
PETALING JAYA: The credit crunch that is causing havoc in the US and European financial markets has little impact so far on local insurance companies but their performance may take a knock if the financial crisis worsens, industry players said.
“If the credit crunch persists, it may affect the performance of insurance companies as it will have an impact on the local economy, hence affecting spending,” an insurer said.
Already, Kurnia Asia Bhd has felt the whiplash from the global financial hurricane.
It posted a net loss of RM301.79mil for the financial year ended June 30 due to an underwriting deficit and a significant reduction in total investment income due to the poor performance of stock markets.
Kurnia Asia executive chairman Tan Sri Kua Sian Kooi claimed that despite the loss, the company was stronger than ever.
The company recently raised RM400mil via a capital injection and currently has a total capital base of RM600mil.
“Our claims reserves have strengthened to more than RM1.88bil from RM1.66bil in the last financial year,” Kua told StarBiz. “This places the company in an excellent position and confidently allows us to meet our commitments to our policyholders, agents and stakeholders.”
With the new capital, Kurnia would be able to “move forward, expand and strengthen our network,” he said.
Allianz Malaysia Bhd chief executive officer (CEO) Alexander Ankel said the current credit crunch had minimal impact on the company because its exposure to the local stock market had been reduced. Allianz also had “minimal exposure in foreign investments,” he added.
Anker said it was difficult at this juncture to predict the outcome should the credit crisis persist.
Manulife Insurance Bhd president and CEO Peter Robertson said the credit crunch might slow growth but sales would continue to grow.
Hong Leong Assurance Bhd group managing director and CEO Charlie E Oropeza said the company anticipated its business to grow despite the challenges because economic downturns created a need for insurance protection.
“The company’s investments are mainly in the local markets and we do not have exposure to collateralised debt obligations and exotic instruments,” he said.
“Our investments are well diversified and exposure to the stock market has been kept to a minimum and in sound dividend-yielding stocks.’’
http://thestar.com.my/news/story.asp?file=/2008/10/8/business/2211456&sec=business
PETALING JAYA: The credit crunch that is causing havoc in the US and European financial markets has little impact so far on local insurance companies but their performance may take a knock if the financial crisis worsens, industry players said.
“If the credit crunch persists, it may affect the performance of insurance companies as it will have an impact on the local economy, hence affecting spending,” an insurer said.
Already, Kurnia Asia Bhd has felt the whiplash from the global financial hurricane.
It posted a net loss of RM301.79mil for the financial year ended June 30 due to an underwriting deficit and a significant reduction in total investment income due to the poor performance of stock markets.
Kurnia Asia executive chairman Tan Sri Kua Sian Kooi claimed that despite the loss, the company was stronger than ever.
The company recently raised RM400mil via a capital injection and currently has a total capital base of RM600mil.
“Our claims reserves have strengthened to more than RM1.88bil from RM1.66bil in the last financial year,” Kua told StarBiz. “This places the company in an excellent position and confidently allows us to meet our commitments to our policyholders, agents and stakeholders.”
With the new capital, Kurnia would be able to “move forward, expand and strengthen our network,” he said.
Allianz Malaysia Bhd chief executive officer (CEO) Alexander Ankel said the current credit crunch had minimal impact on the company because its exposure to the local stock market had been reduced. Allianz also had “minimal exposure in foreign investments,” he added.
Anker said it was difficult at this juncture to predict the outcome should the credit crisis persist.
Manulife Insurance Bhd president and CEO Peter Robertson said the credit crunch might slow growth but sales would continue to grow.
Hong Leong Assurance Bhd group managing director and CEO Charlie E Oropeza said the company anticipated its business to grow despite the challenges because economic downturns created a need for insurance protection.
“The company’s investments are mainly in the local markets and we do not have exposure to collateralised debt obligations and exotic instruments,” he said.
“Our investments are well diversified and exposure to the stock market has been kept to a minimum and in sound dividend-yielding stocks.’’
http://thestar.com.my/news/story.asp?file=/2008/10/8/business/2211456&sec=business
Local banks remain resilient
Wednesday October 8, 2008
PETALING JAYA: Local banks have remained resilient amid the global financial crisis thanks to the stringent measures adopted by Bank Negara after the Asian financial crisis of 1997.
Deputy Finance Minister Datuk Kong Cho Ha said the banking and financial system was reformed in such a way that local banks were not exposed to any US subprime effects.
“We are very fortunate because our economic fundamentals are still very sound, especially our banking industry, and I would say that our banks are still very resilient,” he said after a press conference on the 2nd Global Bio-Herbs Economic Forum, which will be held from Nov 15 to Nov 17.
On the downward trend of the local stock exchange, Kong said “any investors would now adopt a wait-and-see attitude.”
“The current performance of the US and major European stock markets, as well as the East Asian markets including Japan and Hong Kong, will inevitably cause loss of confidence among the investors.
“However, as in any economic crisis, there are vast opportunities for investors to look into,” he said.
Kong said investors would have to decide for themselves on the right time for the right investment opportunities.
Although Malaysia would be affected by the fallout, as with other countries, Kong said it would not actually affect the economic fundamentals of the country.
“Our stock market downturn is not as bad as some other major markets in the world and that shows that our market is actually very healthy at comfortable price-to-earnings of about 11 or 12 times.”
http://thestar.com.my/news/story.asp?file=/2008/10/8/business/2211463&sec=business
PETALING JAYA: Local banks have remained resilient amid the global financial crisis thanks to the stringent measures adopted by Bank Negara after the Asian financial crisis of 1997.
Deputy Finance Minister Datuk Kong Cho Ha said the banking and financial system was reformed in such a way that local banks were not exposed to any US subprime effects.
“We are very fortunate because our economic fundamentals are still very sound, especially our banking industry, and I would say that our banks are still very resilient,” he said after a press conference on the 2nd Global Bio-Herbs Economic Forum, which will be held from Nov 15 to Nov 17.
On the downward trend of the local stock exchange, Kong said “any investors would now adopt a wait-and-see attitude.”
“The current performance of the US and major European stock markets, as well as the East Asian markets including Japan and Hong Kong, will inevitably cause loss of confidence among the investors.
“However, as in any economic crisis, there are vast opportunities for investors to look into,” he said.
Kong said investors would have to decide for themselves on the right time for the right investment opportunities.
Although Malaysia would be affected by the fallout, as with other countries, Kong said it would not actually affect the economic fundamentals of the country.
“Our stock market downturn is not as bad as some other major markets in the world and that shows that our market is actually very healthy at comfortable price-to-earnings of about 11 or 12 times.”
http://thestar.com.my/news/story.asp?file=/2008/10/8/business/2211463&sec=business
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