Thursday, January 4th, 2018

 

Johari lists three reasons for missing ‘feel good’ factor

KUALA LUMPUR: Consumers are not feeling the growth of the economy because of market cannibalisation from the oversupply of shopping malls and online purchases as well as the lagging effect of the economy, said Second Finance Minister Datuk Seri Johari Abdul Ghani.

Firstly, he pointed out that Malaysia’s retail space per capita is 4.9 sq ft, higher than Singapore (4.5 sq ft), Hong Kong (3.4 sq ft) and Bangkok.

“Malaysia has an oversupply of shopping mall, so much so that every shopping mall cannibalise each other and everyone is feeling the gap and impact of the weak consumer spending,” Johari said during the “In Conversation” session at the CIMB 10th Annual Malaysia Corporate Day today.

Secondly, he added that online purchases also contributed to this lack-of-growth feeling.

“When you see a growth in our private consumption, it’s not reflected into retail, we need to look at the contribution of online purchases towards cannibalising the impact of the retail business.”

Thirdly, he said one needs to look at the lagging effect of the economy of six to eight months.

“Last year, we grew an average 4.2%, but the impact is only felt now because of the lagging effect. Today even when we recorded 6.2% (GDP), we’ll only see the impact after eight months,” said Johari.

He added that Malaysians spend some RM42 billion overseas; while pointed out that those who go to umrah today spend RM300,000 compared with RM80,000 six years ago.

Meanwhile, Johari said the Statistics Department’s survey sampling for its studies is larger, adding that it has 3,400 samples that covers shopping malls, retail, including online, compared with Retail Group Malaysia (RGM) that only has about 100 outlets (samples) centred around shopping mall players and retail chain stores.

Last month, RGM had revised its full-year retail sales growth forecast downwards for the third time since the end of 2016, from 3.7% to 2.2%, after retail sales fell 1.1% in the third quarter of 2017.


Three reasons for missing ‘feel good’ factor

KUALA LUMPUR: Consumers are not feeling the growth of the economy because of market cannibalisation from the oversupply of shopping malls and online purchases as well as the lagging effect of the economy, said Second Finance Minister Datuk Seri Johari Abdul Ghani.

Firstly, he pointed out that Malaysia’s retail space per capita is 4.9 sq ft, higher than Singapore (4.5 sq ft), Hong Kong (3.4 sq ft) and Bangkok.

“Malaysia has an oversupply of shopping mall, so much so that every shopping mall cannibalise each other and everyone is feeling the gap and impact of the weak consumer spending,” Johari said during the “In Conversation” session at the CIMB 10th Annual Malaysia Corporate Day today.

Secondly, he added that online purchases also contributed to this lack-of-growth feeling.

“When you see a growth in our private consumption, it’s not reflected into retail, we need to look at the contribution of online purchases towards cannibalising the impact of the retail business.”

Thirdly, he said one needs to look at the lagging effect of the economy of six to eight months.

“Last year, we grew an average 4.2%, but the impact is only felt now because of the lagging effect. Today even when we recorded 6.2% (GDP), we’ll only see the impact after eight months,” said Johari.

He added that Malaysians spend some RM42 billion overseas; while pointed out that those who go to umrah today spend RM300,000 compared with RM80,000 six years ago.

Meanwhile, Johari said the Statistics Department’s survey sampling for its studies is larger, adding that it has 3,400 samples that covers shopping malls, retail, including online, compared with Retail Group Malaysia (RGM) that only has about 100 outlets (samples) centred around shopping mall players and retail chain stores.

Last month, RGM had revised its full-year retail sales growth forecast downwards for the third time since the end of 2016, from 3.7% to 2.2%, after retail sales fell 1.1% in the third quarter of 2017.


MARC expects Bank Negara to raise rates by 25-50bps this year

PETALING JAYA: Malaysian Rating Corp Bhd (MARC), which expects Malaysia’s real gross domestic product (GDP) to expand by 5.3% in 2018, anticipates Bank Negara Malaysia (BNM) will raise the Overnight Policy Rate (OPR) by 25-50 basis points (bps) this year.

In its Economic Research report today, MARC said it believes the stronger-than-expected headline growth in 2017, backed by the strength of the external sector and resilient consumer spending will be the driving force for the possible rate hike in the near term.

On the fiscal side, MARC said it is of the view that the government’s revenue target is achievable if the current uptrend in the global economy is sustained throughout 2018.

Beyond 2018 however, MARC said it anticipates that the government would have to find more revenue sources to complement its existing income base as it is risky to depend on oil-related revenue based on current oil market developments.

This year, the rating agency said it expects private consumption to remain resilient, growing by an average of 7.2%.

Furthermore, MARC said the external trade is key to the country’s economic performance in 2018, noting it expects Malaysia’s real exports to grow by 4.5% this year.

It added that the domestic economy will also benefit from higher contribution from investments in 2018, noting the ongoing large infrastructure projects such as MRT2, LRT3, Pan Borneo Highway, Menara Warisan and others will continue to support the upward momentum in investment.

As for inflation, MARC said it expects both cost and demand pressures to rise and hold the inflation rate at around 3% in 2018.

“The lag effect from higher pump prices and rising food prices in the past few months will likely persist in 2018. The recent rally in commodity prices such as crude oil will likely add to the upward price pressure as well.”

Nevertheless, MARC said while Malaysia remains vulnerable to capital outflows due to the large holdings of government securities by foreign investors, several positive factors will likely be supportive of the ringgit against the US dollar.

“They include the expected weakness of the greenback against major currencies in view of a synchronised recovery of the global economy; Malaysia’s commendable export performance; a strong domestic economy, supported by consumer spending and investments and; an expectation of an interest rate hike which will result in net capital inflows into Malaysian shores,” it added.


Caely shares hit limit up, slapped with UMA query

PETALING JAYA: Lingerie firm Caely Holdings Bhd was issued an unusual market activity (UMA) query by Bursa Malaysia, after its shares hit limit up earlier today.

The stock jumped 30 sen or 38.5% to close at RM1.08, with some 18.29 million shares changing hands. Its share price has more than doubled in the past one month.

The company was required to disclose any corporate development, rumour or other possible explanation that could have contributed to the recent spike in its share price.

Caely’s six-month net profit ended September 30, 2017 plunged 95.25% to RM187,000 against RM3.94 million, due to lower contribution from its property and construction as well as manufacturing segments.


Ringgit ends at 20 month high at 4.0050 versus US dollar

KUALA LUMPUR: The ringgit ended at a 20-month high of 4.0050/0080, up 80 basis points, against the US dollar versus Wednesday's close of 4.0130/0180, following market speculation that Bank Negara Malaysia intervened to prop up the local currency.

Inter-Pacific Securities Sdn Bhd Research Head Pong Teng Siew said the ringgit has bucked the regional trend as the market speculation lent support for the ringgit's bullish performance.

The local note last touched this level on May 5, 2016.

Traders also said the local currency was fundamentally strong just as the Thai Bhat.

“The ringgit has strengthened substantially by about 9.6% since Dec 29, 2017 when it stood at 4.0440/0500 versus the greenback,” said one trader.

The ringgit also improved against a basket of major currencies.

It climbed against the Singapore dollar to 3.0129/0156 from Wednesday's 3.191/0240 and rebounded vis-a-vis the yen at 3.5584/5614 from 3.5735/5782 yesterday.

The local unit appreciated against the euro to 4.8228/8280 from 4.8304/8373 on Wednesday and rose versus the British pound to 5.4240/4296 from 5.4513/4593 yesterday. — Bernama


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Bullish ringgit ends at 20-month high

KUALA LUMPUR, Jan 4 — The ringgit ended at a 20-month high of 4.0050/0080, up 80 basis points, against the US dollar versus Wednesday’s close of 4.0130/0180 following market speculation that Bank Negara Malaysia intervened to prop up the local…


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KL shares end firmer, CI at almost 3-year high

KUALA LUMPUR: Persistent buying momentum amid positive market sentiment globally pushed Bursa Malaysia to end on a firm note today, with the Composite Index (CI) finishing at an intra-day high, which is also the highest in almost three years.

The benchmark FTSE Bursa Malaysia KLCI was in positive territory throughout the day, closing 10.66 points higher to 1,803.45 from yesterday's close of 1,792.79.

The key index touched 1,810.11 in May 2015 before retreating to below 1,800 thereafter, dampened by the fall in global oil prices.

Affin Hwang Investment Bank Vice President/Head of Retail Research, Datuk Dr Nazri Khan Adam Khan, said the current favourable market conditions, with the strong fundamentals, stronger ringgit against the US dollar, rally in commodity prices, helped boost the bourse.

He said the CI's attempt to break through the 1,800-psychological level indicated 2018 would be a good year for Bursa Malaysia and its regional peers.

“The global economy is showing improvements with good momentum. This indirectly proved that the Asia Financial Crisis 1997/98 will not be repeated as per what was being rumoured,” he told Bernama.

Nazri Khan said the strong Wall Street performance last night, which saw all the three main US indexes notching all-time records, provided good vibes in the global equities.

Regionally, Japan's Nikkei 225 soared 3.26% to 23,506.33, Hong Kong's Hang Seng rose 0.57% to 30,736.48 and Singapore's Straits Times increased 0.72% to 3,489.30.

South Korea's Kospi, however, fell 0.8% to 2,466.46.

He said the new resistance level for CI was set at 1,830 while support level now stood at between 1,730 and 1,800.

The overall market breadth in Bursa Malaysia was bullish as gainers outnumbered losers 716 to 353, while 364 counters were unchanged, 378 untraded and 30 others suspended.

Total turnover decreased slightly to 5.05 billion shares worth RM3.28 billion compared with 5.11 billion shares worth RM3.68 billion yesterday.

Among heavyweights, Maybank and CIMB gained two sen each to RM9.80 and RM6.55 respectively.

Public Bank eased two sen to RM20.74.

Petronas Chemicals chalked up 24 sen to RM8.19, Sime Darby surged 27 sen to RM2.68, Maxis bagged eight sen to RM6.03 and Tenaga advanced 10 sen to RM15.40.

The gains in these four stocks lifted the FBM KLCI by a total of 8.78 points.

Of the actives, PA Resources perked two sen to nine sen, UMW Oil & Gas and Sino Hua-An earned 3.5 sen each to 36.5 sen and 49.5 sen respectively, Sumatec inched up half-a-sen to 5.5 sen and Diversified Gateway bagged 1.5 sen to 15.5 sen.

On the scoreboard, the FBM Emas Index surged 106.43 points to 13,036.81, FBMT 100 Index soared 98.25 points to 12,686.71, the FBM Emas Shariah Index climbed 172.54 points to 13,466.49, the FBM 70 jumped 204 points to 16,265.02, and the FBM Ace advanced 73.7 points to 6,903.9.

Sector-wise, the Finance Index improved 44.24 points to 16,968.81, the Industrial Index rose 51.23 points to 3,360.39 while the Plantation Index secured 50.63 points to 7,994.82.

Main Market volume rose to 3.17 billion units worth RM2.969 billion from 2.90 billion units worth RM3.32 billion on Wednesday.

Volume on the ACE Market improved to 1.335 billion shares valued at RM225.464 million from 1.20 billion shares valued at RM188.48 million transacted yesterday.

Warrants volume, however, shrank to 532.44 billion units worth RM83.04 million from 1.20 billion units worth RM167.34 million previously.

Consumer products accounted for 116.68 million shares traded on the Main Market, industrial products (1.19 million), construction (95.65 million), trade and services (1.31 billion), technology (110.91 million), infrastructure (5.89 million), SPAC (4.05 million), finance (92.69 million), hotels (1.32 million), properties (195.44 million), plantations (41.46 million), mining (26,100), REITs (10.07 million), and closed/fund (8,400). — Bernama


Bursa ends firmer on buying momentum

KUALA LUMPUR, Jan 4 — Persistent buying momentum amid positive market sentiment globally pushed Bursa Malaysia to end on a firm note today, with the Composite Index (CI) finished at an intra-day high, which was also the highest in almost three…