INVE$T | Market Sentiments
PMB Investment introduces its first global equity fund
According to PMB Investment Bhd CEO Mahani Ibrahim, the wholly-owned subsidiary of Pelaburan Mara Group, has launched its maiden global equity fund that caters to investors seeking capital growth over the medium to long term. The PMB Shariah Global Equity Fund (PMBSGEF) provides investors access to an actively managed portfolio of global shariah-compliant securities. The fund’s minimum initial investment is RM1,000 for individual investors and RM10,000 for institutional investors, while the minimum additional investment is RM100 and RM1,000 respectively. The fund invests up to 99.5% of its net asset value (NAV) into shariah-compliant global equities and related securities in more than 15 countries including the US, United Arab Emirates, China and Japan. PMB Investment is partnering with Nasdaq Dorsey Wright, a leading advisor to Wall Street and investment managers worldwide, to manage the fund using its proven methodologies and investment strategies. PMB Investment believes the fund offers an attractive opportunity for Malaysian investors looking to ride on the recovery trend on shariah-compliant investments.
Agrobank, MAFI announce RM110 mil financing campaign for SMEs, micro agropreneurs
According to Ministry of Agriculture and Food Industries (MAFI) Minister Datuk Seri Dr Ronald Kiandee, Agrobank in collaboration with MAFI, has allocated RM110 million fund to support small and medium enterprises (SMEs) and micro agropreneurs. The fund had been allocated through a financing campaign called Dana Agromakanan Keluarga Malaysia in line with the Keluarga Malaysia (Malaysian Family) concept. The fund was set up to ensure the sustainability of agricultural and food industries while also stimulating economic growth. The launch of this campaign coincides with the National Agrofood Policy 2021-2030 (DAN 2.0), which aims to drive the development and modernisation of agro-food industries for the next 10 years, and Agrobank has pledged to continue supporting the DAN 2.0. It will be channelled through two of Agrobank’s financing programmes. The first is Agromakanan (PENJANA), which includes financing assistance for entrepreneurs under microenterprise and the B40 group with a total fund of RM50 million, maximum financing up to RM50,000 and profit rate as low as 3.5% per annum. The second is the Dana Pembiayaan Agromakanan (DPA) financing, specifically for agropreneurs in the food industry to increase local production and reduce imports with a total fund of RM60 million. The financing offer is up to RM10 million with a profit rate of 3.5% per annum (RM10,000-RM5 million) and 4.75% per annum (RM5 million-RM10 million). The bank will waive the guarantee fee for both Agromakanan (PENJANA) and DPA funds during the campaign period. The campaign is valid until the RM110 million is fully utilised or up to Dec 31, 2021, whichever comes first.
DHL to invest RM200m to build auto-sort gateway at KLIA by 2023
According to DHL Express Malaysia and Brunei managing director Julian Neo, the global logistic provider plans to invest RM200 million to build its first fully auto-sort gateway at Kuala Lumpur International Airport (KLIA) by the first quarter of 2023. Located at KLIA Air Cargo Terminal One (KACT1), the 13,422 square metre gateway will nearly triple the size of its current facility in KLIA. The Kuala Lumpur Gateway will be equipped with state-of-the-art technologies and designed for optimal shipment processing efficiency, including a high-speed dimensioning and weighing system. There has been a significant rise in import and export volumes in Malaysia and the fully auto-sort gateway will enable DHL to manage the increasing growth of shipment and parcel volume. The facility will be equipped with an automated sort system that can handle 10,000 packages per hour, 24 hours a day, as compared to the current 2,400 packages per hour. The new gateway will have two dedicated aircraft flying five times a week to and from Hong Kong, and four times a week to and from Singapore. The move coincides with the Malaysian Transport Ministry’s efforts to upgrade Malaysia as a transport and logistics hub in the region by 2025.
RAM Ratings: Banking sector not out of the woods yet, but remains resilient
According to Wong Yin Ching, RAM Ratings’ co-head of financial institution ratings, the Malaysian banking sector is expected to stay resilient in 2022 amid the challenges of the Covid-19 pandemic. Even as impairments begin to surface in the coming year, credit losses will be amply cushioned by healthy earnings accretion, comfortable provisioning buffers and solid capitalisation. In the next 12 months, most ratings in RAM’s banking portfolio will remain intact. RAM also projects loan growth to come in at 4% in 2022, in line with the anticipated economic recovery. This is a higher rate than the 3% forecasted for 2021 and the 2.5% recorded in August. The household sector will anchor growth next year with mortgages as the main driver, similar with what was seen in previous years. This is not surprising as Malaysia has a young demographic where household formations are high and there is an underlying demand for homes. For business, on the other hand, RAM is only projecting a slight pick-up as most firms are currently operating below capacity. Even as the economy gradually recovers, they do not see firms rushing to invest or expand just yet.
Meanwhile, RAM senior analyst Loh Kit Yoong added that funding and liquidity conditions are envisaged to stay healthy. Banks’ liquidity coverage ratio has generally hovered around 150%, well above the 100% minimum. They believe that Bank Negara Malaysia (BNM) has a strong incentive to ensure ample liquidity in the financial system; the many regulatory flexibilities introduced since the onset of the pandemic is a testament of that. Although most banks will likely extend further relief to borrowers who are still viable when the nationwide opt-in moratorium expires in the first half of 2022, RAM expects some impairments to start crystallising in the latter part of the year. As such, RAM projects the gross impaired loan ratio to rise to between 2.3% and 2.5% in 2022 from the current 1.7% that has been contained by wide-ranging loan repayment assistance and moratorium. As at end-July 2021, about 30% of total loans were under relief. Based on discussions with some banks, majority of their borrowers under relief stemmed from the middle- and higher-income brackets. They are of the view that a sizeable portion of borrowers had taken the moratorium as a precautionary measure, given that bulk of these relief loans actually have zero arrears. As banks have set aside sizeable forward-looking provisions and management overlays in 2020, RAM foresees banks’ average credit cost ratio to ease to between 50 and 60 basis points (bps) next year, from the expected 60 to 70bps for 2021. While hopeful of an economic rebound in 2022, the banking sector is not out of the woods yet. That said, banks went into the Covid-19 pandemic from a position of strength. RAM believes the sector will remain on solid footing amid our nation’s protracted recovery
Eye On The Markets
This week, on Friday (29Oct), the Ringgit opened at 4.1560 against the USD from 4.1535 on Monday (25Oct). Meanwhile, the Ringgit was 3.0795 to the Sing Dollar on Friday (29Oct). On Monday (25Oct), the FBM KLCI opened at 1586.77. As at Friday (29Oct) 10:00am, the FBM KLCI is down 17.39 points for the week at 1569.38. Over in US, the overnight Dow Jones Industrial Average closed up 239.79 points (+0.68%) to 35,730.48 whilst the NASDAQ added 212.30 points (+1.39%) to 15,448.10.
