Thesun 2009-03-20 Page15 Fed To Buy Treasuries To Boost Economy

theSun

15

| FRIDAY MARCH 20 2009

business

KLCI STI Hang Seng SSE

852.18 1,584.86 13,130.92 2,265.76

4.22 8.92 13.75 42.03

Nikkei TSEC KOSPI S&P/ASX200

Fed to buy Treasuries to boost economy WASHINGTON: The US Federal Reserve said it will start large-scale buying of government debt as part of an extra US$1 trillion (RM3.7 trillion) injection into the ailing economy, sparking a rally in government bonds and trouncing the dollar. The Fed announced on Wednesday it would buy up to US$300 billion (RM1.11 trillion) of longer term US government debt over the next six months in the first operation on such a scale since the 1960s. It also would expand an existing scheme to buy mortgage-related securities by another US$850 billion (RM3.145 trillion), to US$1.45 trillion (RM5.37 trillion) this year. The move stunned markets as few Fed watchers had expected it to follow Japan and Britain in pumping money directly into the economy so soon. The news drove US home mortgage rates towards record lows and Treasury bond yields dived the most in one day since the 1987 stock market crash. The Fed’s move to add direct government bond buying to its expanding arsenal of unconventional weapons inspired hopes that the aggressive action will help pull the US economy out of a crippling recession and

lifted Asian stock markets outside Japan to a five-week high. But the dollar suffered its biggest one-day drop since 1985 against a basket of main currencies, stung by fears that by effectively printing money, the Fed would create an oversupply of the world’s main reserve currency. Some economists said that even at such a hefty cost the Fed may not get what it was hoping for. “Will the next trillion dollar injection gain any more traction? Probably not. Banks don’t want to lend and borrowers don’t want to borrow,” said economists at DBS Bank in Singapore. “The fact remains that expansionary policy at the bottom of a cycle is like pushing on a string,” the bank’s research team said in a note, stressing that fixing the ailing banks was necessary for recovery to take hold. The Fed’s announcement came hours after the Bank of Japan boosted its government bond purchases plan for this year by nearly a third to ¥21.6 trillion (RM832.5 billion) and days after the Bank of England started buying government bonds with newly created money to breathe life into the faltering British economy. – Reuters

Goodyear in Fortune’s most admired firms list KUALA LUMPUR: The Goodyear Tire & Rubber Co has once again been recognised as one of the most admired companies in the world by Fortune magazine. Among the companies in Fortune’s World’s Most Admired Companies’ Motor Vehicle Parts category, Goodyear was the highest-ranked tyre company, the No. 1 ranked US-based company and ranked No. 2 overall. In the global Motor Vehicle Parts category, Goodyear was ranked either No. 1 or No. 2 in five of the nine key attributes measured. Goodyear was top-ranked in Use of Corporate Assets and Social Responsibility, and ranked second in Innovation, Quality of Products and Services and Global Competitiveness. Among US companies in the global category, Goodyear was ranked No. 1 or No. 2 in all nine attributes.

The tyre maker was top-ranked in Innovation, Quality of Products and Services, Use of Corporate Assets, Social Responsibility, Quality of Management, People Management and Global Competitiveness. In a statement here yesterday, Goodyear chairman/chief executive officer Robert J. Keegan said the global recognition by industry peers was something for which all Goodyear associates could be proud of. In Malaysia, Goodyear is the leading brand of choice for consumers and companies such as Mercedes Benz, Volvo, Honda, Mazda, Toyota, Nissan, Ford, Hyundai, Proton, Perodua, Naza, Hino, Daihatsu, Inokom, Malaysian Truck and Bus and Isuzu. Goodyear Malaysia Bhd is the first Goodyear plant to be certified ISO9002 in 1992, QS9000 and ISO14001 in 2002, and ISO/TS16949 certification in 2003. – Bernama

7,945.96 5,035.93 1,161.81 3,480.20

-26.21 -11.61 -8.14 33.90

KL market summary MARCH 19, 2009 INDICES

CHANGE

FBMEMAS 5,541.92 COMPOSITE 852.18 INDUSTRIAL 2,054.34 CONSUMER PROD 280.33 INDUSTRIAL PROD 64.39 CONSTRUCTION 163.35 TRADING SERVICES 113.55 FINANCE 6,315.45 PROPERTIES 500.28 PLANTATIONS 4,386.47 MINING 241.15 unch FBMSHA 5,904.28 FBM2BRD 3,835.45 TECHNOLOGY 11.59

+25.64 +4.22 -3.56 +0.55 +0.10 -0.13 +0.73 +15.35 +1.85 +9.45 +11.19 +14.92 +0.08

TURNOVER

VALUE

303.824mil

RM543.544mil

CI stays up SHARE prices on Bursa Malaysia closed mixed with key heavyweights remaining up boosted by the overnight rally on Wall Street, dealers said. The benchmark KLCI ended the day 4.22 points higher at 852.18, after opening 2.17 points higher at 850.13. A dealer said the overnight surge on Wall Street followed the Federal Reserve’s announcement that it would inject a further US$1 trillion (RM3.7 trillion) into the economy, including a US$300 billion (RM1.11 trillion) purchase of long-term Treasuries. Bursa is expected to move in line with Wall Street’s movement today. Investors were encouraged with the positive movement on Dow Jones, which chalked up a 90-point gain on Wednesday night. Gainers led losers by 230 to 215 while 200 counters were unchanged, 597 untraded and 32 others suspended. Among the actives, TMI rose eight sen to RM2.24, Resorts increased three sen to RM1.93 and KNM was unchanged at 35 sen. As for the heavyweights, Sime Darby closed five sen lower at RM5.45, Tenaga Nasional rose 15 sen to RM6.20, Maybank advanced 18 sen to RM4.26 and TM fell two sen to RM3.50. – Bernama

EU-US rift on crisis ‘dangerous’: Merkel BERLIN: Differing approaches by the European Union and the United States to solving the global economic crisis would be “extremely dangerous,” German Chancellor Angela Merkel said yesterday. Hitting back at US calls for Europe to introduce heftier measures to

fight the recession, Merkel said: “I would find it extremely dangerous if countries on different sides of the Atlantic were to take different directions.” Speaking in the German parliament, Merkel added: “We need psychologically good signals from

London” where a crunch meeting of the Group of 20 developed and developing economies will take place on April 2. Merkel rejected criticism that the €81 billion (RM403.3 billion) already pumped into Europe’s largest economy was insufficient. – AFP