Inve$t | Market Sentiments | 29 September 2023
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According to Bank Negara Malaysia (BNM) Governor Datuk Abdul Rasheed Ghaffour, the National Energy Transition Roadmap (NETR) and New Industrial Master Plan (NIMP) are expected to accelerate the country’s transition and open large investment opportunities.
The central bank, along with the Securities Commission Malaysia, has focused efforts on laying down relevant building blocks for a conducive green finance ecosystem to facilitate a just and orderly transition. Frameworks and practical tools such as the climate change and principle-based taxonomy, sectoral guides, and climate risk management and scenario analysis policy document have been developed as guidance for the industry in building its climate resilience as well as capability in contributing towards transition.
Macroeconomic stability, a strong and stable financial sector, and sound policymaking institutions have been essential factors supporting Malaysia’s economic development journey thus far. He was speaking during a panel discussion titled “Macro Resilience and Market Insights” at Invest Malaysia New York organised by Bursa Malaysia.
BNM’s mandate reaffirms its commitment to promote monetary and financial stability conducive to the sustainable growth of the Malaysian economy. Malaysia’s growth will continue to be driven by resilient domestic expenditure underpinned by continued employment and wage growth. He added that investment activity will be supported by the continued progress of multi-year infrastructure projects and implementation of catalytic initiatives under the recently announced national master plans. Domestic financial conditions also remain conducive to financial intermediation amid sustained credit growth.
On the Ringgit, he said that despite the depreciation during 1H 2023, the local currency and several regional currencies have strengthened against the US dollar since July 1, 2023. He added that recently, the Ringgit appreciated against most major trade partners’ currencies.
Looking ahead, he expects further clarity on the end of the monetary policy tightening cycle by major central banks to provide support to the Ringgit and emerging market currencies in general. He stressed that the value of the Ringgit is market-determined. The presence in the foreign exchange market is only to prevent excessive volatility and to ensure orderly market conditions and that there is no target of any specific level for the Ringgit.
Malaysia’s portfolio investors and its financial markets are progressive, dynamic and supported by steady market development. He concluded by saying that the Malaysian government bond market stands out as one of the largest and most developed in the region. And that it remains stable and liquid with attractive real yields to investors.
Malaysia’s economy expected to continue to moderate in the near term – DOSM
According to Department of Statistics Malaysia (DOSM) Chief statistician Datuk Seri Mohd Uzir Mahidin, Malaysia’s economy is expected to continue to moderate in the near term, based on data in July and August. Malaysia’s economy exhibited moderate growth during the first half of 2023, expanding by 4.2%. The half-year performance came after a 5.6% growth in the first quarter and a 2.9% growth in the second quarter.
Total trade in July 2023 declined 14.4% from RM252.8 billion in the same month last year to RM216.4 billion. Exports shrank 13.1% to RM116.8 billion, while imports contracted 15.9% to RM99.7 billion. Meanwhile, the trade surplus increased 7.9% from the previous year to RM17.1 billion.
Malaysia’s total trade registered a value of RM213.0 billion, with a contraction of 19.8% or RM52.7 billion, while exports and imports recorded a negative double-digit growth at 18.6% and 21.2% respectively, year-on-year. On the contrary, the trade surplus increased marginally by 0.1% to post a value of RM17.3 billion.
In July 2023, Malaysia’s Industrial Production Index (IPI) rebounded to 0.7% in July 2023, from -2.2% in the previous month. The marginal increase in July 2023 was supported by growth in the mining sector (4.2%) and the electricity sector (1.5%). The manufacturing sector remained negative, although at a lower rate of 0.2%.
At the same time, the value of manufacturing sales in Malaysia totalled RM144.0 billion in July 2023, down for a second consecutive month, decreasing to -3.0% year-on-year (y-o-y), from -4.0% in the preceding month. The performance was primarily influenced by continuous decline in the petroleum, chemical, rubber and plastic sub-sector, reaching to -15.3% during the month. The sales value of export-oriented industries, which represented 72.1% of total sales, continued to decline by 7.0% in July 2023, versus June’s -7.4%.
The performance of domestic-oriented industries remained vigorous, reaching 9.2% in July 2023, compared to 6.8% in June 2023, mitigating the impact of deterioration in the export-oriented industries.
Median monthly salaries and wages up 7.7% in 2022 after RM1,500 minimum wage implementation — DOSM
According to chief statistician Datuk Seri Dr Mohd Uzir Mahidin, the median monthly salaries and wages rose 7.7% in 2022 to RM2,424, from RM2,250 in 2021 after Malaysia implemented the minimum wage of RM1,500 in May last year.
In a statement, he attributed the increase to continuous economic and social activities, supported by increasing tourist arrivals and improvements in the labour market, especially in the services sector. The Malaysian government had increased the minimum wage to RM1,500 starting from May 2022, mandating a monthly wage of RM1,500 for employees in all sectors, as a measure that is expected to improve overall salaries and wages conditions in the country as compared to the previous years.
This situation is reflected by the increase in the median monthly salaries and wages received by Malaysian citizens in 2022 which rose by 7.7% to RM2,424 (2021: RM2,250). About 50% of full-time citizen workers received salaries and wages of RM2,424 and below in 2022. Likewise, the mean monthly salaries and wages received by Malaysians in 2022 rose by 5.8%, registering RM3,212 compared to RM3,037 in 2021.
- Mean monthly salaries for all sectors, skilled employees increase
By economic activity, all sectors recorded increases in mean monthly salaries and wages in 2022. The services sector, which was the largest sector in the economy, recorded the highest number of salary and wage recipients, particularly in the sub-sector of wholesale and retail trade activities, education, food and beverages (F&B) and accommodation. This was followed by the manufacturing sector.
The services sector recorded an increase in mean monthly salaries and wages of 5% while the manufacturing sector notched an increase in mean monthly salaries and wages of 7.9%. The mean monthly salaries and wages for skilled employees also increased by 3.7%, registering an additional RM177 to RM5,025 compared to RM4,848 in 2021.
Among skilled employees, managers took home the highest mean monthly salaries and wages at RM6,385, increased by 1.4% as against RM6,296 in 2021 and followed by professionals (RM5,900) and technicians and associate professionals (RM3,668).
The mean monthly salaries and wages of semi-skilled employees rose to RM2,241 (2021: RM2,064), particularly contributed by clerical support workers (RM2,555), followed by plant and machine operators and assemblers (RM2,158), craft and related trades workers (RM2,154) and services and sales workers (RM2,139). The low-skilled category, which includes elementary workers, also increased by RM66 to RM1,815 as compared to RM1,749 in the previous year.
- Mean monthly salaries for urban and rural areas continue to rise
Meanwhile, the mean monthly salaries and wages for both urban and rural areas recorded an upward trend to RM3,351 for urban areas and RM2,393 for rural areas as compared to 2021. Specifically, the mean monthly salaries and wages in urban areas posted a growth of 5.1% (2021: RM3,188, +3.2%), while rural areas exhibited a relatively more substantial growth of 10.5% (2021: RM2,166, +3.9%).
By states, Putrajaya recorded the highest mean monthly salaries and wages at RM4,666. Four other states surpassed the national mean level of RM3,212, namely Kuala Lumpur (RM4,207), Selangor (RM3,737), Labuan (RM3,418) and Pulau Pinang (RM3,313).