INVE$T | Market Sentiments
According to Permodalan Nasional Bhd (PNB) president and group chief executive Ahmad Zulqarnain Onn, the Malaysian government-owned fund management entity’s focus on creating value and generating long-term sustainable returns for its unitholders goes hand in hand with PNB’s commitment to raising financial literacy standards and empowering Malaysians to make better financial decisions for their future. PNB’s statement was issued in conjunction with the Thursday pre-launch of PNB’s Minggu Saham Digital (MSD) from Nov 17 to 23, 2021 after a successful inaugural run in 2020. With the same goal as its predecessor Minggu Saham Amanah Malaysia (MSAM), MSD remains as PNB’s integrated financial literacy platform to achieve this aim. MSD is an evolution from PNB’s MSAM which had been held physically from 2000 until 2019. The digital event is now accessible to a much wider audience throughout the country from the comfort of their own homes and at the touch of their fingertips. MSD 2021 will be broadcast daily between 12.30pm and 10.00pm from Nov 17 to 23, 2021 through its official Facebook page and YouTube channel. The official launch ceremony of MSD 2021 is scheduled for Nov 18, 2021 at 1pm. MSD 2021 follows the encouraging response PNB received for its maiden MSD in 2020 during which the programme received over two million views across its Facebook page and YouTube channel. Learning from last year and seeing the success of MSD 2020 from a number’s standpoint, he is confident and hopes to be able to attract more viewers and engage them with even higher quality content this year. He believes that while planning for financial well-being is a serious matter, learning the ropes need not be. With the official theme #LaburBersama, MSD makes available various resources and educational materials on unit trust investments, risk and return, and financial planning for all Malaysians in the comfort of their own homes.
Malaysia’s consumer spending to begin recovery in 2022 – Fitch
According to Fitch Solutions Country Risk & Industry Research in its Malaysia 2022 Consumer Outlook report, it has forecast household spending in Malaysia to grow by a real rate of 5.1% over 2022 as consumers recover from two years of contraction in spending levels. Spending will follow the wider economic recovery as higher vaccination rates over the first half of 2022 allow for more localities to lift restrictions that have hampered retail sales. However several risks remain to the outlook over 2022, especially in the first quarter of the year, including elevated inflation and the possibility of new Covid-19 variants, which could lead to the reimposition of Covid-19 related restrictions. Total consumer spending would fall to RM855 billion over 2021, 5.4% lower than the RM905 billion recorded in 2019 in the pre-Covid-19 environment. As such the Malaysian consumer recovery from Covid-19 will only begin in 2022. However, the recovery will be rapid enough to total RM915 billion in 2022, building slightly on the figure recorded pre-pandemic. Retail sales in Malaysia had been weak over 2021, with growth mainly coming from a low base. This weakness stems from the prolonged lockdown restrictions impacting both consumers and retailers. These restrictions have been severe in populated regions of the country, like the Klang Valley (centred on Kuala Lumpur and includes its adjoining cities and towns in Selangor) which accounts for approximately 60% of retail sales in Malaysia, delaying the recovery in retail sales. Although vaccination is accelerating, it is unlikely that the country achieves herd immunity before the end of 2021, making a surge in retail sales towards the end of the year improbable. Further downside risks to the forecast, given the high level of political risk since the beginning of 2H21 and the risk that the Covid-19 outbreak could worsen over the coming months, which could further affect both retail sales and consumer confidence. Its consumer spending forecast is in line with its country risk view that the wider economy is forecast to grow by 5.5% over 2022. Malaysia’s economic recovery from the Covid-19 pandemic will be slow, with the country being in a constant state of lockdown for nearly two years. The domestic demand outlook had weakened considerably, with consumer spending in 2021 likely to be worse than in 2020. Citing the Department of Statistics Malaysia, unemployment is likely to rise over 2H21, and already started to climb to 4.8% in June 2021 from 4.5% in May 2021 when unemployment had averaged 3.3% pre-pandemic. Industries Unite, an association of 115 Malaysian businesses, had warned in early July 2021 of impending mass unemployment if the lockdowns were to persist. The serious outbreak will also set back any plans to reopen to international travel, dashing any prospects of tourism and other related sectors beginning to recover in 2021.
Government will step up efforts to help MSMEs – Mustapa
According to Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed, in his keynote address on “Shifting the Malaysian Economy Into Higher Gear: Assessment, Strategy, and Action” at the virtual Perdana Leadership Foundation CEO Forum 2021, the government will intensify its efforts to help micro, small and medium enterprises (MSMEs), especially small business owners, by implementing income-raising and capacity-building programmes in urban and rural areas, as well as by encouraging entrepreneurship and access to financing facilities. The government has recognised that it cannot adopt a “business-as-usual” approach in dealing with post-pandemic challenges. Some of the vulnerabilities and weaknesses exposed by this crisis are certainly not new. Hence, it is imperative that the government take this opportunity to reform the economy and ‘build back better’. In building back better, the 12th Malaysia Plan (12MP) aims to ensure that the nation can achieve high income status by 2025 and be more sustainable in order to ensure that it can become a carbon neutral country at the earliest in 2050. The plan will also provide more balanced development across regions and states to ensure that the fruits of development are equally shared by the citizens. The government’s priorities in the next five years include increasing incomes, eliminating absolute poverty, and reducing development gaps between states and regions, as well as ensuring quality growth that is sustainable.
Eye On The Markets
This week, on Friday (22Oct), the Ringgit opened at 4.1550 against the USD from 4.1590 on Monday (18Oct). Meanwhile, the Ringgit was 3.0949 to the Sing Dollar on Friday (22Oct). On Monday (18Oct), the FBM KLCI opened at 1602.89. As at Friday (22Oct) 10:00am, the FBM KLCI is down 17.38 points for the week at 1585.51. Over in US, the overnight Dow Jones Industrial Average closed down 6.26 points (-0.02%) to 35,603.08 whilst the NASDAQ added 94.0 points (+0.62%) to 15,215.70.