KUCHING: Analysts are lowering their growth forecasts for Malaysia’s Gross Domestic Product (GDP) following a lower-than-expected slowdown in the second quarter of 2018 (2Q18) to 4.5 per cent year on year (y-o-y) from 5.4 in 1Q18. Kenanga Investment Bank Bhd (Kenanga Research) saw that the lower GDP in 2Q18 was below both consensus and house […]
PETALING JAYA: The government needs to be pro-growth as the risks of high debt and a narrower revenue base subside significantly with gross domestic product gaining momentum.
Affin Hwang Asset Management director of equity strategies and advisory Gan Eng Peng said in a note today that the key concern of the market now is whether the country can continue to grow amid all the “kitchen-sinking”.
“Investors are very clear about what's wrong with the country; the 1MDB scandal, high debt levels, and the fiscal deficit. Where there is less clarity now, are policies the government has to promote growth.
“For this, we are waiting for the 100-day Government of Malaysia Symposium which will be held for the first time in September and Budget 2019 that will be tabled on Nov 2,” he said.
Gan pointed that in order to allay the concerns on high debts and narrower revenue base, the government needs to show clear evidence of curbing wastage and leakages.
“We need to start to see this being reflected in better expense/capital expenditure control for government departments and government-linked companies (GLCs).
“If GLCs can demonstrate more efficient capex and strong expense/operating expenditure control, we think this would send a strong signal that Malaysia 2.0 is certainly different from Malaysia 1.0,” he noted.
Meanwhile, Gan said the country may see some slowdown in fourth quarter growth after the tax holiday expires, but overall growth in 2018 should be intact.
He said the concern is more for 2019 as it remains to be seen if government expenditure can be cut without affecting growth, of which the consumer and export sectors need to fill the gap.
While the weakening of the ringgit does help to boost exports, he said, this sector is dependent on foreign labour, which makes it vulnerable to increases in minimum wages or a foreign worker clampdown.
“The other important issue for the market is earnings. Prior to 2017, the market experienced three years of contracting earnings. The recent results season was tepid and many analysts have been revising down their numbers.
“We could end the year with only 2% to 3% growth versus 7% to 8% expected at the beginning of the year,” Gan said.
KUALA LUMPUR (Aug 15): The FBM KLCI pared some of its gains at the midday break today as regional markets retreated. At 12.30pm, the FBM KLCI was up 1.52 points to 1,785.30. The index had earlier risen to its intra-morning high of 1,787.66. Gainers led losers by 304 to 292, while 556 counters traded unchanged. Volume was 1.45 billion shares valued at RM853.07 million. The top gainers included Petronas Dagangan Bhd, Elsoft Research Bhd, Malaysian Pacific Industries Bhd, Tenaga Nasional Bhd, British American Tobacco (M) Bhd, Hartalega Holdings Bhd andRead More
KUCHING: There were generally mixed projections as to Malaysia’s growth domestic product (GDP) growth for the second quarter of 2018 (2Q18) with some believing that the challenges could persist until 2019. AmInvestment Bank Bhd (AmInvestment Bank) said that the economic outlook in 2Q18 should stay healthy, likely to expand around 5.6 per cent to 5.8 […]
KUCHING: A significant amount of Tune Protect Group Bhd’s (Tune Protect) gross written premium (GWP) is expected to be underpinned by Malaysia’s general insurance business for 2018 estimate (2018E), while the rest is to come from digital global travel insurance, analysts observed. For 2018E, Affin Hwang Investment Bank Bhd (Affin Hwang) expected the bulk of […]
KUCHING: Malaysia’s crude palm oil (CPO) production has been forecast by analysts to continue improving in the second half of 2018 (2H18), but at a lower growth rate. The Malaysian Palm Oil Board’s latest statistics revealed that Malaysia’s CPO production for 1H18 had amounted to 8.92 million MT, up from 8.72 million MT in the […]
KUALA LUMPUR (Aug 10): The FBM KLCI pared some of its gains at midday today as decliners overtook advancers, tracking the sentiment at most regional markets. At 12.30pm, the FBM KLCI was up 3.52 points to 1,808.47. The index had earlier risen to a high of 1,812.69. Losers overtook gainers by 289 to 254, while 587 counters traded unchanged. Volume was 1.07 billion shares valued at RM709.42 million. The top gainers included United Plantations Bhd, British American Tobacco (M) Bhd, United Malacca Bhd, Malaysia Airports Holdings Bhd, Petronas Gas Bhd,Read More
KUALA LUMPUR (Aug 9): The FBM KLCI rose 0.26% at the midday break today and stayed firmly above the 1,800-point level, tracking gains at regional markets. At 12.30pm, the FBM KLCI rose 4.73 points to 1,809.46. Gainers led losers by 306 to 274, while 577 counters traded unchanged. Volume was 1.33 billion shares valued at RM1.01 billion. The top gainers included Panasonic Manufacturing Malaysia Bhd, British American Tobacco (M) Bhd, Far East Holdings Bhd, ViTrox Corp Bhd, Ajinomoto (M) Bhd, Hong Leong Financial Group Bhd, United Malacca Bhd, Petronas ChemicalsRead More
KUALA LUMPUR (Aug 8): The FBM KLCI rose 0.39% at the midday break today, as gains in select index-linked blue chips lifted it closer to the 1,800-point mark, tracking the advance at regional markets. At 12.30pm, the FBM KLCI rose 7.04 points to 1,798.13. Gainers led losers by 359 to 235, while 566 counters traded unchanged. Volume was 1.55 billion shares valued at RM1.19 billion. The top gainers included Far East Holdings Bhd, Bintulu Port Holdings Bhd, ViTrox Corp Bhd, ABM Fujiya Bhd, Hartalega Holdings Bhd, Hong Leong Industries Bhd,Read More