Posts Tagged ‘automation’

MALAYSIAN RINGGIT…… the best performing Asian currency

The “ringgit” is the official currency in Malaysia which is often known as the Malaysian dollar. The Malaysian dollar or ringgit is sub divided in to 100 sens, which are known as cents in foreign markets.

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Performance

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The Ringgit Malaysia (RM) is one of Asia’s best performing currencies in 2010 which has appreciated by 6% against the US dollar, 19% against the euro and 16% against the British pound. There were several factors which contributed to the stellar performance of the ringgit. Amongst them include Malaysia’s better than expected economic recovery, the central bank’s monetary tightening policies, the New Economic Model (NEM), speculation on revaluation of China’s yuan coupled with speculative funds inflow into Malaysia’s financial system. The currency’s strength isn’t likely to affect exporters as Europe’s sovereign debt crisis may increase capital flows to Asia & inter-Asia trade is expected to keep Malaysia’s exports at healthy growth levels. Malaysia’s exports to Europe make up some 10 per cent of its total exports.

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The Pros And Cons Of Stronger Ringgit …

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Pros:

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·Encourages the import of capital goods, which contribute to the innovation and automation of industries in the country.

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·Improves the living standards of the people by increasing their purchasing power through cheaper imports and lower inflationary pressure.

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Cons:

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·A stronger ringgit could pose challenges to the exporters of this export dependent export-dependent Malaysia such as palm oil companies.

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·The stronger ringgit usually trims the refiner margins as crude palm oil feedstock for refined products is priced in the currency. Any wild swings in the ringgit hurt refiners. “For every 100 basis points’ appreciation in the ringgit, refining margins fall by US$2-US$4 a tonne.

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·“For example, if the ringgit keeps strengthening, where previously you would collect 3.2 for every US dollar you earn, now you get only 3.1,”

Impact On Palm Oil Industry

Palm’s advance is also limited by the firmer ringgit, which has become a key determinant in price direction of late. In other words, CPO price could not be separated from the economics of converting crude palm oil, priced in ringgit, into dollar-based refined palm oil products.

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The benchmark August futures on the Bursa Malaysia Derivatives Exchange are again moving in a range searching for direction from here. Immediate support is at 2,395-2,400 (Malaysian ringgit) MYR/tonne while resistance is at 2,520 MYR/tonne followed by 2,550 MYR/tonne on the upside.

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Ringgit gain from revaluation of Yuan?

A higher yuan could actually spell good times for the Asian currencies. In other words, Ringgit would further increase as Chinese Yuan is expected to increase and ringgit typically increases with the appreciation of Yuan. China, including Hong Kong, is Malaysia’s biggest export market. A stronger yuan will be a bigger strength for China – more buying power for Malaysian goods, which would help boost shipments.

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Nonetheless, the ringgit’s upside might be somewhat limited. Malaysia being an export-oriented economy, the central bank might intervene to limit gains in the ringgit to ensure Malaysia’s exports remain competitive.

NEWS ROUND UP

Economy

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·IIP for the month of January grew 16.7% on year. The mining sector grew 14.6% in the month while the manufacturing sector grew 17.9%. The electricity sector witnessed a growth of 5.6% in the month.

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India’s annual food price index increased 17.81% as on week ended February 27, slower than the 17.87% growth recorded last week. A year ago, food prices were up 7.54%.

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Healthcare

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·Fortis Healthcare announced the largest overseas acquisition by an Indian company in the healthcare space, buying the entire 23.9 per cent stake held by TPG Capital in Singapore’s Parkway Holding Ltd for $686 million (Rs 3,119 crore).

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Capital Goods

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·ABB Ltd. has bagged orders worth $22 million (nearly Rs 100 crore) from Haryana Vidyut Prasaran Nigam for the supply of four sub-stations. The company would deliver four sub-stations equipped with automation, protection and control systems to HVPNL.

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·Areva T&D India has bagged a contract worth Rs 400 crore from Uttar Pradesh(UP) Power Transmission Corporation for building a substation. The company’s transmission and distribution division will build a 765 KV extra high voltage substation at Anpara thermal plant in UP.

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·Thermax announced a JV with US-based Babcock & Wilcox Power Generation Group to manufacture super-critical boilers in the country. The total investment in the JV is estimated at Rs 700 crore.

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·McNally Bharat Engineering Company has bagged an order worth Rs 245.42 crore from Steel Authority of India Ltd for infrastructure related works at Rourkela steel plant. The contract is for inter-plant transportation facilities at Rourkela steel plant.

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Mining & Minerals

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·State-owned miner NMDC is planning to invest around Rs 2,400 crore to lay a pipeline between its Chhattisgarh plant and Visakhapatnam in Andhra Pradesh.

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Realty & Construction

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·Gammon India has bagged an order worth Rs Rs 631.81 crore from Delhi Tourism and Transportation Development Corporation for construction of bridge. The company has received the project for construction of bridge and its approaches over river Yamuna, Delhi.

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·Hindustan Construction Company (HCC) has plans to invest around Rs 50,000 crore in its township project in Lavasa, near here, over the next 10-12 years ·Hindustan Construction Company (HCC) along with its joint venture partner has bagged a contract worth Rs 197 crore from North Frontier Railway for
development of a tunnel in Imphal.The company has bagged the project along with its JV partner Coastal Projects Ltd for developing a railway tunnel between Jiribam and Tupur in Imphal.

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·Nagarjuna Construction Company secured new contracts aggregating to Rs 1,221 crore. The first order is of two contracts valued at Rs 647 crore from Hyderabad Growth Corridor. In addition, it has secured three contracts worth Rs 358 crore from Maharashtra State Electricity Distribution.

·Construction firm Ahluwalia Contracts India is in acquisition talks for specialised construction firms, with a war-chest of up to Rs 100 crore, and hopes to sew up the deal by June. The New Delhi-based firm sees a 25-30 per cent organic growth for next five years and acquisitions of up to Rs 100 crore could be funded from its internal resources.

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Banking & Finance

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·Rural Electrification Corporation Ltd (REC) signed a memorandum of understanding (MoU) with NTPC Tamil Nadu Energy Company Ltd (NTECL), a joint venture company set up by NTPC and the Tamil Nadu Electricity Board (TNEB), to fund a power project in North Chennai. Of the total project cost, 30 per cent is being met by equity and balance through debt.

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Distilleries

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·The country’s largest liquor maker United Spirits is undertaking an aggressive promotion campaign for its recently launched energy drink ‘Romanov Red’.

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The company will invest over Rs 5 crore in the next one year on promotions, as it aims to garner a 15 per cent share in the domestic energy drink market that stands at around 1.5 million cases (of 24 cans) per annum.

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Stay Tuned for More updates 🙂