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World in Brief

China export trade booms in tough times

As global trade figures fall owing to the worldwide slowdown, China has emerged as
the major beneficiary of consumers and businesses seeking cheaper goods.
This has been reflected by it leapfrogging Germany to emerge as the world's biggest exporter as
Chinese factories engage in aggressive cost slashing to reduce the price of their goods
in foreign markets. China's position has also been bolstered by positive reports that
the decline in export trade was not as bad as initially feared.

Having earlier forecasted a 21% fall in exports year-on-year in September,
the General Administration of Customs revealed that actual figures showed a
better-than-expected fall of just 15.2% year-on-year in the month concerned.
The slower rate of decline has been welcomed by observers as a sign that the
world's third largest economy is picking up pace and more importantly as
an indication that world trade is showing signs of improvement.

Further optimism has been fuelled by signs that exports rose by 6.3% month-on-month
from August to September. This has led to forecasts that year-on-year trade will
show a positive trend as soon as November or December of this year.

Charter rates for vessels up 10%

US: Charter rates on container vessels plying the North American route from Malaysia have been increased by 10%. A notice on the general rate increase was sent out by Evergreen Marine Corp of Taiwan, informing its customers that it has raised rates by at least US$400 for 20-foot containers and by US$500 for 40-foot containers. Other shipping agents, such as Maersk Line, are also expected to adjust their rates as competitively as possible.

Analysts have opined that the rise in rates indicate that a reversal of the downward trend in charter rates have started to take place. Due to the impact of the global economic crisis, charter rates have been on free fall since the middle of 2008. Rates for a 40-foot container from Port Klang to Florida used to cost US$3,400 at the end of June this year, compared to a high of US$4,500 in June last year. The analysts further added that the rise in rate will spark off an increase in demand in the coming months as exporters try to take advantage of current rates as the rates are also expected to increase further.

The rising charter rates also come at a time when shipping operators are expecting a supply of new ships to accommodate the decision to increase the number of laid-up box ship fleet by 66% to two million 20-foot containers by end of this year or early 2010 from the current 1.2 million.

"Freight levels have hit low points over the last year and now,
carriers are busy trying to restore rates to respectable levels."

- Anthony Randall,
Sales Director for Australia Maersk Line.

Refining fuel-hedging strategies

UK: Major airlines from Europe and the US are looking to further refine their increasingly costly
fuel-hedging strategies as they grapple for a recovery amid the continuing global aviation slump. The airlines maintain that hedging is needed to protect themselves against the risk of a sustained crude price rally, which is currently hovering between US$65 and US$75. For example, after incurring substantial losses from their fuel hedge portfolios following the steep fall in oil prices, US-based airlines Southwest Airlines has scaled its fuel-hedge portfolio back a little in 2009. Nevertheless, they continue to depend on the success of its fuel-hedge portfolio which has insulated it from rising energy costs that ravaged its rivals in the first half of 2008.

As for European-based airlines, Lufthansa, Germany's flag carrier, has already implemented an
extensive fuel-hedging policy covering up to 85% of its fuel purchases. It also said it will
only make money from the programme if crude prices are able to reach US$90 this year. UK budget carrier
Ryanair has already revealed that it has hedged up to 90% of its fuel needs for the remainder of 2009.

Code-share solution for JAL

Japan Airlines Corp (JAL) has been urged by Ryuhei Maeda, the Director-General of the Japanese
Civil Aviation Bureau, to consider expanding its code-sharing agreements with other airlines in order
to increase passenger flow without incurring costs for opening new routes. The Tokyo-based airline,
which already has a code-sharing agreement with American Airlines, has been forced to cut international
routes which adversely affected its number of passengers after it became the most debt-ridden
carrier in Japan, having posted a Y$99b (US$1.04b) loss during the end of Q1 2009.
Maeda said that the carrier will greatly benefit from code sharing with Delta Air Lines Inc.,
the world's largest carrier and Delta's Northwest Airlines Corp, the biggest overseas carrier at
Narita International Airport, as it will expand their network and increase passenger traffic in the airport.

MITI steps in to ease customs clearance

Malaysia's Ministry of International Trade and Industry (MITI) revealed that it will allow
clearance of non-critical steel and iron ore products, such as bolts, nuts and screws,
at all the country's major Customs checkpoints, which is enforced with immediate effect.
However, only critical steel and iron ore products will be given pre-clearance.

Tan Sri Abdul Rahman Mamat, Secretary-General of MITI, hopes the decision will be able to
solve clearance problems following rules requiring such products to have a certificate of
approval (COA), which were enforced since the 1st of August. The decision to ease rules for
non-critical iron and ore item came following calls from industry and trade representatives to
rescind the COA directive, many of whom are unhappy about the products getting stranded at
Customs because they did not have a COA from Sirim and Construction Industry Development Board.
Tan Sri Abdul Rahman further added that the ministry will meet with industry and
trade representatives to make clear details regarding what are critical and non-critical items
and how to identify them via an efficient coding system.