Local investment outlook brightens as the Malaysian government announces the removal of the 30% bumiputra equity quota in 27 services sub-sectors, with immediate effect. Prime Minister Datuk Seri Najib Tun Razak also said that more services sub-sectors would be liberalised progressively (liberalization in the financial sector will be announced next week), heralding a more competitive and efficient sector going forward. Data revealed that inflation slowed to an 11-month low of 3.5% in Mar, giving the central bank room for further interest rate cut to help revive growth. Foreign reserveS dropped 0.2% to USD87.65bn in mid Apr compared to end-Mar, as outflow of capital continues to erode the country’s reserve.
· In the US, mortgage applications last week rose 5.3% from the week before, not so much because of increase in purchases but rather due to loan refinancing. House price index also gained for a second consecutive month in Feb by 0.7%, adding signs of stabilization in the house price slump.
· Meanwhile, unemployment rate in UK rose sharply to 6.7%, amid report that the government support for the banking system has risen to GBP1.4 trillion and may climb higher. The government has taken over four banks, insured assets and underwritten loans to spur an economy ravaged by the global credit crisis.
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