Economy Highlights

US - Existing-home sales fell in May to six-month low

Sales of existing US homes decreased in May to the lowest level in six months, a sign that the housing market is lagging other parts of the economy. Purchases of existing homes fell 3.8% to a 4.81m annual pace last month, in line with the 4.8m median estimate in Bloomberg News survey of economists, data from the National Association of Realtors showed. The median sales price declined from a year earlier and 31% of transactions were of distressed dwellings. An unemployment rate hovering around 9% and tight credit standards mean it may take years to absorb the 1.8m distressed properties on the market that are weighing down home values. Persistent weakness in the housing market is one reason why Federal Reserve policy makers are likely to maintain record stimulus when they meet this week.(Bloomberg)


Greece - Papandreou wins Greek confidence vote, boosts rescue chances

Greek Prime Minister George Papandreou won a vote of confidence, bolstering his new government’s chances of pushing through austerity measures to secure further international financial aid for the country. A total of 155 lawmakers supported the motion in the 300-seat parliament in Athens early this morning, with 143 voting against, the speaker, Filippos Petsalnikos, said. Papandreou reshuffled his Cabinet and sought the approval of the chamber after fending off a revolt within his socialist Pasok party last week. After the vote, police used tear gas to disperse crowds protesting Papandreou’s budget cuts. (Bloomberg)


Malaysia - Minimum wage bill tabled

A bill that will pave the way for the implementation of minimum wages was tabled at the Dewan Rakyat for the first and second reading yesterday. The National Wages Consultative Council Bill 2011, tabled by Deputy Human Resources Minister Datuk Maznah Mazlan, seeks to replace the Wages Council Act 1947 and set up a National Wages Consultative Council to conduct studies on minimum wage. The council will also make recommendations to the government on minimum wages according to sectors, types of employment and regions. Prime Minister Datuk Seri Najib Razak said he hoped to have the minimum wage policy in place by year-end if Parliament passed the bill. Once the bill is passed, the council can make recommendations through the minister on coverage, commencement and implementation of recommended minimum wage rates. (NST)


Malaysia - Car sales impacted by amended Act

Worried about the possibility of trickling cash flow, a rise in booking cancellations and longer lead time for completion of sales, many stakeholders in the automotive sector say the recent amendments to the Hire-Purchase Act 1967 (HPA) will hurt the car retail trade. Already, there are complaints of a slowdown in sales. Under the amendments, effective 15 June, all used vehicles for sale will undergo Puspakom’s 18-point inspection to ensure their roadworthiness. Another issue of contention was the 1% maximum booking fee (based on the total selling price) mandated by the amended Act, which requires car sellers to refund customers 90% of the booking fee if the deal falls through. (StarBiz)


IMF - Lipsky says IMF not negotiating new Greek bailout program

The International Monetary Fund isn’t negotiating a second rescue package for Greece while it weighs whether to approve the next payment of the country’s initial program, acting IMF head John Lipsky said. “We are not negotiating a new program,” Lipsky said. “There always exists that possibility, but there has been no request by the Greek authorities to negotiate such a new program. We are concentrated today on the existing program and what is needed to put it back on track and to therefore allow the next disbursement.” Greece was due to receive the fifth payment of its original EUR 110 bn (USD157.5bn) rescue this month. Under the original bailout, Greece was due to return to markets and sell about EUR 30 bn in bonds next year. The country remains shut out of markets and the IMF has called on the EU to come up with a plan to close that funding gap before it will release its funds. (Bloomberg)