Saturday, February 24, 2007

KLCI index Surge for Real & Lasting OR Ground Exercise for a General Election? Rife Speculation - Election by Year End under Feel Good Factors

The speculation is widely predicted by the opposition that a snap election is on the cards. The latest indication is from Datuk S Samy Vellu after chairing MIC CWC meeting on 22nd Feb 2007 in Kuala Lumpur. He told newsmen he had directed all Chairman’s of State MIC chiefs to set up election committee in preparation of the coming General Election.

The committee is task to go to the electro roll of the respective constituency make house-house visit. Anwar Ibrahim the advisor to PKR and soon to be President also predicts an early one and opposition PAS is preparing. But others felt the BN is preparing but isn't about to call one as Abdullah doesn't need a new mandate although under pressure to prove his mettle.

In another matter, Samy Vellu was asked about reports that he did not want another Ministerial position for MIC but clarified that he had suggested many time to the PM for another Ministerial position in the government.

“It is up to the government to think. We have already made our appeals several times. Normally the positions of Minister and all these, we do not discuss. No I don’t want another minister; I like to be a single minister. That’s what some fellow from outside was saying”

Asian Wall Street Journal; February 23, 2007
Is Malaysia Near a Vote?; Talk Rallies Stocks, But Late '08 Election Appears More Likely; By HASAN JAFRI

KUALA LUMPUR, Malaysia -- Malaysia is seeing a wave of speculation that Prime Minister Abdullah Ahmad Badawi is about to call snap elections, even though analysts and diplomats dismiss the idea. Economic numbers show the country in a feel-good phase: 2006 two-way trade was a record one trillion ringgit ($286 billion), gross domestic product last year grew at about the targeted 6% level, while the stock market -- up 16% so far in 2007 -- looks set to reach all-time highs. The ringgit is trading near a nine-year high and bond prices have also risen sharply. Talk of an election is so strong that on Feb. 17 the ruling party-owned Utusan Malaysia newspaper said on its front page it is "Time to disband Parliament," a move that typically precedes the calling of an election. Malaysian stocks traditionally rally ahead of elections on hopes of increased spending and incentives to lure voters.

But many observers strongly doubt there will be a quick election, and if the speculation peters out, the market could decline slightly. Political observers argue that Mr. Abdullah would want to wait until the latter half of 2008, when he would be able to highlight the results of several high-profile projects on which he has staked his political reputation. In celebrating the positive economic numbers, "Abdullah is clearly trying to drum up sentiment," an Asian diplomat said. "He's preparing the ground for an election but isn't about to call one.

I think second half of 2008 is a more realistic time frame." Khairy Jamaluddin, Mr. Abdullah's son-in-law and deputy leader of the ruling coalition's dominant United Malays National Organization party's youth wing, told Dow Jones Newswires his view is "it's a little premature" to call an election. Politically there is no compelling reason...," he said. "The prime minister doesn't need a new mandate." The impact of "the Ninth Malaysia Plan projects [that] are just being rolled out...will be felt on the ground in the next 12-18 months," Mr. Khairy said. Mr. Abdullah led the ruling coalition to a landslide victory in March 2004 and doesn't need to call elections until March 2009. While his less combative public persona offers a contrast to that of his predecessor, Mahathir Mohamad, Mr. Abdullah has come under pressure to prove his mettle. The prime minister has spent the first half of his five-year term trying to wean Malaysia away from Dr. Mahathir's can-do attitude on the economy, which led to excessive spending. Mr. Abdullah has cut the fiscal deficit and introduced economic and corporate policy changes that he said will create the right environment for sustainable

long-term economic growth. While economists have applauded Mr. Abdullah's decisions to trim government spending, the Malaysian electorate isn't pleased with the belt tightening, particularly when it leads to rising prices for gasoline and higher road tolls among other costs. That is where the Ninth Malaysian Plan comes in. The five-year, 220billion ringgit plan is regarded as crucial in supporting Malaysia's economic development and ambition to become a developed nation by2020. The plan is aimed at positioning Malaysia to grow at least 6% each year, and the spending, when it kicks in, could also buffer the economy against a possible slowdown in global growth, economists say. Since the plan was announced more than a year ago, dozens of projects have been identified, including a second bridge to link Penang to mainland Malaysia to boost business on the northern island. However, red tape is slowing the implementation. Making the Ninth Malaysia Plan work is Mr. Abdullah's biggest challenge, given the country's poor record of implementing infrastructure projects on time and without cost overruns.

Last year Mr. Abdullah threatened to fire "Little Napoleons" in the bureaucracy if they didn't act fast enough, and this year he formed a high-level committee of mostly bureaucrats to ensure smooth implementation. Without some concrete signs of progress on the economic front, Mr. Abdullah would be hard put to find the more buoyant public sentiment needed to assure him of the political mandate he seeks. Data that typically measure public sentiment continue to indicate that the mood among voters remains downcast, in part because increases in wages haven't kept up with the rising costs of living, particularly in urban areas. Job growth has also been slow. "Although Abdullah does mean business, based on his many statements against corruption, the public remains unconvinced that enough is being done substantially," Ramon Navaratnam, president of Transparency

International Malaysia, said in the New Straits Times newspaper Wednesday.Write to Hasan Jafri at
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February 23, 2007 00:26 AM

KLCI's Significant Rise Not Influenced By Govt, Says Abdullah

KUALA LUMPUR, Feb 23 (Bernama) -- Prime Minister Datuk Seri Abdullah Ahmad Badawi Thursday denied that the government had influenced the significant rise in the Kuala Lumpur Composite Index of late. He said this when responding to a question on speculation that the rise in the share market was artificially induced by the government to face the general elections."What did the government do?" he asked.

The rise in the CI has indeed been stable, and reflective of the increasing interest among both foreign and local investors in the stock market, Abdullah said. Share volume on Bursa Malaysia Securities hit another all-time high of 4.78 billion shares in Thursday's trade. At 5pm, the 100-quality stock Composite Index (CI), which saw an intra-day high of 1,280.51, ended the day 1.70 points lower at 1,276.52. "Foreign investments into Malaysia has gone up and so has domestic investments. Put together, they have exceeded RM42 billion. "Apart from that, our currency has also strengthened. So, is the government doing that? No," Abdullah told a press conference following the Umno supreme council meeting here Thursday. The prime minister, who just arrived from a visit to Indonesia today, said that the improved share market also reflected strong economic fundamentals.

"Besides that, the mergers among big companies recently has been also seen as a good sign for our economic future. These are the factors that have convinced investors about our economy," he said. Abdullah, who is also the Finance Minister said the relatively low share prices on the local market were also an attraction. A declining deficit, a stable economy and Malaysia's capability to meet the challenges of increased oil price in the global market last year were also other factors that have contributed to the bullish share market. The development in southern Johor has also attracted the interest of foreign investors, he pointed out.

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February 23, 2007 15:26 PM

Govt Will Decide When To Internationalise Ringgit - Zeti

KUALA LUMPUR, Feb 23 (Bernama) -- The government will decide when to internationalise the ringgit, Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz said Friday.

"The government will monitor the environment and we will only consider when it will be on Malaysia's interest to do so," she told reporters when asked on the matter after delivering her opening remarks at INCEIF's Inaugural Intellectual Discourse Series, here.

The ringgit, pegged to a basket of currencies, is currently being traded at around RM3.50 to a dollar. On inflation, she said the inflation rate is expected to move up and down but on an average it will remain below three percent in 2007. Inflation stood at 3.1 percent in December, giving the whole year of 2006 3.6 percent. The government is schedule to release the latest figure on Feb 28.

February 23, 2007 17:11 PM
Press Statement; by Lim Guan Eng
(21/2/2007); Lim Guan Eng, Secretary-General of DAP
(Petaling Jaya, Wednesday): Datuk Seri Abdullah Ahmad Badawi is spurring a stockmarket frenzy and buying boom in blue chip counters with the first indication in history by a Malaysian Prime Minister that the KLCI might breach 1,350 points. Abdullah said during the Chinese New Year that after hitting a 10-year high of 1, 262.1 points last week, the KLCI might breach the 1,350 mark – which would be the highest in Malaysia's history.

For a Prime Minister to publicly state such a target, it is clear how high the stock market will scale and it would not surprising to see Malaysians investing fully in blue chip counters to earn guaranteed quick profits. For investors, there is no risk to invest in the Bursa Malaysia as Abdullah would not only lose his credibility completely if the KLCI does not break 1,350 points, but investors may even claim losses from the Prime Minister should they lose money by taking his stock advice.
Abdullah had based his confidence that the KLCI would break its record on the rise in foreign reserves, the lower deficit, the record RM 46 billion invested by local and foreign investors, national trade volume of RM1,069 billion last year, up 10.5% from the previous year. However such goods news may be an inspiration to the rich and those with cash to invest but not to the many small businessmen and workers.

.If the Prime Minister is inspired by the performance of the economy, why is it that many Malaysian small businessmen and workers are not equally inspired? According to the Ninth Malaysian Plan (9MP), the mean monthly household income for a Malaysian family was RM 3,249 in 2004. This is misleading as it is doubtful that a Malaysian family would have even a monthly household income of RM 3,249 now.

With the economy performing at such an "inspiring" level in 2006, the mean monthly household income should even be higher. But does every Malaysian family get to enjoy the fruits of the country's economic success equally with a mean monthly household income of more than RM 3,249?

The answer is in the United Nations Human Development Report which consistently list Malaysians as suffering the worst income inequality between the rich and poor in South-East Asia . The 9MP shows the share of income of the bottom 40% of the population declined from 14.5% in 1990 to 13.5% in 2004 whilst the share of the top 20% of the population increased from 50% in 1990 to 51.2% in 2004. Malaysians want real inspiration in the form of bonuses and real wage increases, not false inspiration of good economic performance that is not shared by all but enjoyed by only the few.

Malaysian spin on economy sparks poll talk

Monday February 12, 4:54 PM
KUALA LUMPUR (Reuters) - Malaysia's media has been trumpeting good news
about the economy
, and that is stoking speculation of an early election this year. Prime Minister Abdullah Ahmad Badawi does not need to hold an election until early 2009, and insists he is in no hurry following the big mandate that he won in 2004. But political analysts do not rule out snap polls this year.” The PM is likely to give more candies, including the promised review of civil service's salary, if he decides to go for polls this year," said political analyst Yahaya Ismail. At the weekend, Abdullah's ruling party revved up its election machinery to try to regain power in the northeastern state of Kelantan, ruled by the conservative Islamic party PAS since 1990. PAS, or Parti Islam se-Malaysia, is also gearing up for the polls.

"We expect the election this year," one official told Reuters. Analysts say the climate appears favourable to Abdullah. Malaysia's opposition parties remain relatively muted, and the economy, the government says, is on a roll. The mainstream media, which generally cheers the administration, went to town last week with a slew of upbeat stories ranging from a record 2006 trade volume to rocketing share prices, a stronger ringgit and rising foreign reserves. "Good times are back," blared one headline in the best-selling Star newspaper, summing up comments by Second Finance Minister Nor Mohamed Yakcop. "The feel good factor is clear. Retailers are enjoying better business and restaurants are packed," the minister said. "Economy now more resilient than ever," was the headline in the New Straits Times, a daily controlled by Abdullah's ruling party. More such stories are on the cards, said one editor, who attended a government briefing recently.

OLD BOSS AND BLOGGERS The PR drive and promises of higher spending on state projects could help Abdullah fend off challenges posed by two big thorns in his sidebloggers and his outspoken old boss, Mahathir Mohamad. The former premier has called Abdullah's government "gutless", giving vent to a host of bloggers who have often targeted Abdullah personally, accusing him of pampering himself while raising living costs. "The PM is now on the offensive," said one media strategist who advises several ministers. "With the feel good factor, Mahathir will have no or the slightest impact on voters." Abdullah, 67, has kept the election card close to his chest. "What I'm thinking now is about work," he said last week after announcing the record

trade volume figures. "There's a lot of work now." Abdullah won the last election in 2004 by a landslide on a pledge to fight corruption and carry out reforms. He can choose to delay the polls until mid-2008. But that could present a new danger. Opposition figure Anwar Ibrahim, freed from jail in 2004, is banned from standing for parliament until April 2008. But if the polls are held after that, the 59-year-old could emerge from his political wilderness.

Despite the government spin, the real economic picture is not that rosy and Abdullah's promises of reform remain largely unfulfilled, critics say. Private economists only expect growth of 5.5 percent this year, against an official forecast of six percent, largely because of weaker U.S. demand for Malaysian exports. Car sales are unlikely to pick up sharply this year while property sales are sluggish as consumers, concerned about job security, remain wary of big-ticket purchases."We have to tighten our belt. There are not many jobs around, and there is
less purchasing power," said Lokman Mohamad, a building contractor. "Some firms also face cash flow problems."

Malaysia's Islamic opposition expects elections this year, starts preparing

By VIJAY JOSHI; Associated Press Writer; Feb 10, 8:17 PM EST

KOTA BARU, Malaysia (AP) -- Malaysia's main Islamic opposition party has started preparing for general elections, saying it expects the government to seek a new mandate later this year - at least 17 months ahead of schedule. The Pan-Malaysian Islamic Party, known by its Malay acronym PAS, held a major closed-door meeting of party members on Saturday night to discuss strategy for the elections, party officials said. The meeting, presided by party leader Nik Aziz Nik Mat, was held in Kota Baru, the capital of northeastern Kelantan state, the only Malaysian state ruled by an opposition party.

The remaining 12 states are ruled by Barisan Nasional, a multiethnic coalition dominated by Prime Minister Abdullah Ahmad Badawi's United Malays National Organization, a moderate Muslim party. Reporters were not allowed into the meeting, but PAS vice president Husam Musa told The Associated Press that the party expects elections to be called either in early September or late October.

Abdullah has refused to specify a date for the elections that must be held before March 2009. But political circles are rife with speculation that he may call early polls while the country's economy is doing well and not take the chance of dealing with an unforeseen crisis during election year. Also, there is fear that former Prime Minister Mahathir Mohamad, who has been carrying on an anti-government campaign for more than one year, may step up his attacks and weaken the party by 2009. Musa said elections could be held after the Aug. 31 Independence Day celebrations but before the start of the fasting month of Ramadan in mid-September, or in late October after the budget has been presented.

Government officials were not immediately available to comment on the PAS speculation. Asked why the party has started preparations so early, Musa said: "We are the weak students, we need to learn early. Not like UMNO who can come in any time and be strong." PAS, whose aim is to create a theocratic Islamic state, holds only a handful of seats in the national parliament but has controlled the Kelantan state assembly since 1990. It has governed with Islamic principles including a ban on rock concerts and gambling, restricted alcohol sales and a dress code for Muslim women.

The PAS government recently lifted bans on karaoke lounges and snooker parlors in a bid to shed its hardline image. The party suffered a stunning defeat in the last national elections in 2004, and afterward tried to project itself as more moderate by reducing its religious rhetoric. In recent party elections, a crop of young leaders including Musa were elected as office bearers. About 60 percent of Malaysia's 26 million people are Muslims but the PAS defeat was seen as a rejection of its hardline policies.

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= = =latest post (Feb 24) Go H E R E on

Tan Sri ROBERT KUOK HOCK NIEN, Malaysian Business Top 40 Richest M’sians (SUGAR KING - Worth RM32.4b) NOT RELATED to Johore MP Datuk SHAHRIR’s Chinese WIFE; No 2: Ananda Krishnan (RM19.2b); No3: Quek Leng Chan (RM10.2 b), No:4


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