Perkara di atas dengan segala hormatnya adalah dirujuk.
2. Adalah dimaklumkan, selaras dengan kelulusan Belanjawan 2021, Program Insentif Pengambilan Pekerja dan Program Latihan (PenjanaKerjaya 2.0) masih diteruskan dengan beberapa kategori baru dan syarat permohonan, bagi membantu para majikan yang mengambil pekerja baharu seterusnya bersama membantu kerajaan dalam menangani isu pengangguran dalam tempoh pandemik Covid-19 ini. Pihak majikan yang mengambil pekerja baharu akan menerima insentif kewangan sehingga RM6,000.00, mengikut kategori insentif,bagi setiap pekerja untuk tempoh sehingga 6 bulan ataupun RM 1,000.00 untuk tempoh 3 bulan bagi setiap perantisan yang diambil.
3. Pihak majikan kini boleh membuat permohonan PenjanaKerjaya 2.0 mulai 1 Januari 2021, melalui portal Penjana Kerjaya bagi setiap pekerja baharu yang telah diambil pada atau selepas 21 Disember 2020 tertakluk kepada terma dan syarat kelayakan yang telah ditetapkan. Bersama-sama ini dilampirkan Infografik dan Soalan Lazim (FAQ) Program Insentif Pegambilan Pekerja dan Program Latihan (PenjanaKerjaya 2.0) untuk perhatian dan rujukan pihak tuan / puan.
Sebarang pertanyaan, sila hubungi Pusat Panggilan PenjanaKerjaya 2.0 di talian 03-80915300 atau emel kepada penjanakerjaya@perkeso.gov.my. Tuan / puan juga kini boleh ikuti perkembangan kami di media sosial EISPERKESO untuk maklumat terkini dan program yang akan dilaksanakan.
Sekian, terima kasih.
Pentadbir Program PenjanaKerjaya 2.0
Perkara di atas dengan segala hormatnya adalah dirujuk.
2. Adalah dimaklumkan, selaras dengan kelulusan Belanjawan 2021, Program Insentif Pengambilan Pekerja dan Program Latihan (PenjanaKerjaya 2.0) masih diteruskan dengan beberapa kategori baru dan syarat permohonan, bagi membantu para majikan yang mengambil pekerja baharu seterusnya bersama membantu kerajaan dalam menangani isu pengangguran dalam tempoh pandemik Covid-19 ini. Pihak majikan yang mengambil pekerja baharu akan menerima insentif kewangan sehingga RM6,000.00, mengikut kategori insentif,bagi setiap pekerja untuk tempoh sehingga 6 bulan ataupun RM 1,000.00 untuk tempoh 3 bulan bagi setiap perantisan yang diambil.
3. Pihak majikan kini boleh membuat permohonan PenjanaKerjaya 2.0 mulai 1 Januari 2021, melalui portal Penjana Kerjaya bagi setiap pekerja baharu yang telah diambil pada atau selepas 21 Disember 2020 tertakluk kepada terma dan syarat kelayakan yang telah ditetapkan. Bersama-sama ini dilampirkan Infografik dan Soalan Lazim (FAQ) Program Insentif Pegambilan Pekerja dan Program Latihan (PenjanaKerjaya 2.0) untuk perhatian dan rujukan pihak tuan / puan.
Sebarang pertanyaan, sila hubungi Pusat Panggilan PenjanaKerjaya 2.0 di talian 03-80915300 atau emel kepada penjanakerjaya@perkeso.gov.my. Tuan / puan juga kini boleh ikuti perkembangan kami di media sosial EISPERKESO untuk maklumat terkini dan program yang akan dilaksanakan.
Sekian, terima kasih.
Pentadbir Program PenjanaKerjaya 2.0
At 9.17am, the benchmark index FTSE Bursa Malaysia KLCI (FBM KLCI) was down 3.75 points at 1,593.73, compared with yesterday's close of 1,597.48.
Gainers and losers were neck and neck at 322 and 388, while 409 counters were unchanged, 1,257 untraded and 24 others suspended.
Its group managing director Datuk Khairussaleh Ramli said on Wednesday through the RM5bil commitment, “we hope to play a bigger role in supporting the growth of the green economy by encouraging our customers to adopt more sustainable business practices”.
As at Sept 30, the group has grown its green financing portfolio to RM3bil, up by 6.3% from Dec 31,2019 which include renewable energy, green buildings, sustainable water and wastewater management.
In a statement, it said the RHB Sustainability Framework involves embedding sustainable practices into the group’s business and operations.
This is part of its sustainability vision of building a sustainable future, premised on three key pillars of “Sustainable and Responsible Banking, Embedding Good Practices and Enriching and Empowering Communities”.
Khairussaleh said the banking group was stepping up its efforts to support the country’s aspiration to transition to a low-carbon and climate resilient economy.
“Promoting the growth of the green economy involves channelling capital towards supporting sectors and economic activities that can make the biggest difference in the fight against climate change.
“This also requires us to nurture businesses, and stimulate innovation and development of environmentally-friendly products and services, ” he said.
RHB Investment Bank Bhd, the investment banking arm of RHB Banking Group was recently awarded the Green Deal of the Year at the Asian Banking & Finance Corporate & Investment Banking Awards 2020 for arranging a RM200mil Asean Green SRI Sukuk programme.
The maiden issuance under the programme was awarded the Best Asean Green SRI Sukuk at The Asset Triple A Islamic Finance Awards 2020.
The programme adopts the Shariah principles of Wakalah Bi Al-Istithmar and Murabahah (via Tawarruq arrangement).
Proceeds from the issuance are used to fund sustainable and responsible investment projects, among other Shariah-compliant purposes. RHBIB was the sole principal adviser, sole lead arranger and sole lead manager for the programme.
Elaborating on its green financing, Khairussaleh said RHB Banking Group has put in place a clear roadmap in promoting sustainable and responsible financing within the group, by ensuring that its risk management processes integrate Environmental, Social and Governance (ESG) considerations.
“On the other hand, we are also mindful of the stage of the development of the country and the need to be practical in our adoption of ESG considerations.
“Our role within the community goes beyond simply advocating commitment to green financing, but also ensuring socio economic well-being of our communities, ” he added.
Its group managing director Datuk Khairussaleh Ramli said on Wednesday through the RM5bil commitment, “we hope to play a bigger role in supporting the growth of the green economy by encouraging our customers to adopt more sustainable business practices”.
As at Sept 30, the group has grown its green financing portfolio to RM3bil, up by 6.3% from Dec 31,2019 which include renewable energy, green buildings, sustainable water and wastewater management.
In a statement, it said the RHB Sustainability Framework involves embedding sustainable practices into the group’s business and operations.
This is part of its sustainability vision of building a sustainable future, premised on three key pillars of “Sustainable and Responsible Banking, Embedding Good Practices and Enriching and Empowering Communities”.
Khairussaleh said the banking group was stepping up its efforts to support the country’s aspiration to transition to a low-carbon and climate resilient economy.
“Promoting the growth of the green economy involves channelling capital towards supporting sectors and economic activities that can make the biggest difference in the fight against climate change.
“This also requires us to nurture businesses, and stimulate innovation and development of environmentally-friendly products and services, ” he said.
RHB Investment Bank Bhd, the investment banking arm of RHB Banking Group was recently awarded the Green Deal of the Year at the Asian Banking & Finance Corporate & Investment Banking Awards 2020 for arranging a RM200mil Asean Green SRI Sukuk programme.
The maiden issuance under the programme was awarded the Best Asean Green SRI Sukuk at The Asset Triple A Islamic Finance Awards 2020.
The programme adopts the Shariah principles of Wakalah Bi Al-Istithmar and Murabahah (via Tawarruq arrangement).
Proceeds from the issuance are used to fund sustainable and responsible investment projects, among other Shariah-compliant purposes. RHBIB was the sole principal adviser, sole lead arranger and sole lead manager for the programme.
Elaborating on its green financing, Khairussaleh said RHB Banking Group has put in place a clear roadmap in promoting sustainable and responsible financing within the group, by ensuring that its risk management processes integrate Environmental, Social and Governance (ESG) considerations.
“On the other hand, we are also mindful of the stage of the development of the country and the need to be practical in our adoption of ESG considerations.
“Our role within the community goes beyond simply advocating commitment to green financing, but also ensuring socio economic well-being of our communities, ” he added.
In a trading stocks note today, the reearch house said MTAG crossed above the 21-day SMA line yesterday.
“A positive bias may appear above 70 sen, with resistance levels pegged at 80 sen and 84.5 sen.
“A downside breach of 70 sen would nullify this positive thesis,” it said.
on its view that the current valuations have largely priced in near-term upsides in the semiconductor segment.
This is despite a stable loan growth recorded in September at 4.4% year-on-year (y-o-y), which was mainly supported by household loans growth. According to an analyst, there needs to be a pick-up in business loans growth, which will then signify improving economic conditions.
“Loans growth for mortgages and auto continue to do well, mainly because these types of loans are collateralised. Therefore, the performance of business loans growth will better reflect the state of the economy - whether it has improved, ” the analyst said.
Bank Negara’s September statistics show that business loans growth have declined to 3.2% y-o-y from 3.7% y-o-y in August, on the back of subdued working capital loans growth.
In comparison, household loans, which comprise mortgages and auto loans, grew 5.2% y-o-y in September from 4.8% y-o-y in August.
According to CGS-CIMB Equities Research, the auto loan segment was the key driver of household loans growth, with an acceleration from 1.5% yoy at end-August to 3.6% at end-September this year, in line with robust auto sales spurred by the exemption of sales tax.
Auto loan growth in September marked the strongest recorded since October 2014.
“The momentum for residential mortgages only inched up from 7.5% y-o-y at end-August to 7.6% y-o-y at end-September.
“On the flip side, the contraction in credit card receivables widened from 7.9% y-o-y at end-August to 9.1% y-o-y to RM36.1bil at end-September, accounting for only 2% of the banking system’s total loans, ” said CGS-CIMB.
Meanwhile, UOB Kay Hian Malaysia Research cautioned that the asset quality of banks has not reflected the impact of Covid-19.
Gross impaired loans (GIL) ratio in September improved to 1.38% as compared to 1.4% in August due to the automatic loan moratorium, which continues to mask the potential Covid-19-induced asset quality stress.
UOB Kay Hian expects a slight pick-up in GIL ratio after September, but noted that the GIL ratio will remain generally benign until the end of the targeted loan moratorium.
As such, banks are expected to continue to frontload their loan loss provision (LLP) for Covid-19 risks in the second half of the year.
CGS-CIMB projects a surge of 86.9% in banks’ LLP in 2020.
It said the higher LLP could pave way for an earnings recovery in 2021, with a projected net profit growth of 14.8% for the banking sector in 2021.
The research house deduced that banks’ LLP will likely increase further in the third quarter of the year, given the wider increase in the industry’s total provision of RM1.86bil during the quarter, as compared to the RM1.63bil in the second quarter of the year.
Additionally, loan loss coverage for the banking industry was up from 98.4% in August to 105.2% in September, marking a record high.
“The above-100% loan loss coverage signifies that banks’ total provisions are able to cover more than the total value of their gross impaired loans, ” said CGS-CIMB.
While sentiment on Bursa Malaysia may remain cautious amid political uncertainties ahead of Budget 2021, UOB Kay Hian Malaysia Research expects stocks to rebound as investors’ focus shifts towards the results season.
“We expect the upcoming reporting season to form a key market re-rating catalyst, as key glove manufacturers (particularly Top Glove Corp Bhd) are on course to report stratospheric earnings, and should also guide for loftier profits in the subsequent quarter.
“Ample global and domestic financial liquidity, coupled with an expected protracted period of a globally ultra-low interest rate environment, will continue to support relatively high equity valuations, ” stated the research house.
Speaking with StarBiz, MIDF head of research Imran Yassin Md Yusof (pic below) expects corporate Malaysia to enjoy better earnings generally in the third quarter of 2020 – on a sequential basis.
This is due to the fact that Malaysia has witnessed a resumption in economic activities, unlike in the April-June 2020 period where the operations of most businesses were terribly impacted due to the movement control order (MCO).
“However, we do not expect it (earnings season) to be at pre-Covid-19 level, given that recovery is gradual.
“We also expect the stimulus measures implemented by the government such as the Penjana stimulus package will provide a solid support in general, ” he said.
Imran added that the healthcare sector, which includes glove makers, would continue to outperform other sectors in the third quarter.
“Our expectation is based on the fact that demand for their products remains strong and margins continue to expand, ” he said.
The banking sector, however, is expected to underperform despite the sector’s improvement in earnings as compared to the second quarter of 2020.
“This is due to the expectation that provisions will remain high. Furthermore, there seems to be a lack of visibility of the asset quality of banks after the ending of the loan moratorium, ” according to Imran.
Echoing a similar view, fund manager Danny Wong also believes the third quarter earnings season will be better compared to the second quarter.
However, in a year-on-year comparison, he said many sectors would continue to see dampened earnings performance.
“On the quarter-on-quarter basis, there will be two extremes. On one extreme, there will be sectors whose earnings remain bad or turn from bad to worse. These include companies in the tourism and hospitality sectors.
“On the other extreme, you would see companies that continue to record good or even better earnings growth. Examples would be those in the glove manufacturing and technology sectors, ” said Wong, who is the chief executive officer of Areca Capital.
As for other sectors such as construction and property development, he described the earnings growth as “likely to be neutral”, despite some signs of business improvement from the second quarter.
“If investors are able to hold for one or two years and wait for the business fundamentals to gradually improve, they can surely consider stocks in the sectors that now appear to have a neutral outlook, ” he said.
Looking ahead to the fourth quarter earnings season, Wong said the technology and glove sectors would likely continue to lead the market in terms of earnings performance in the fourth quarter of 2020.
Meanwhile, MIDF Research’s Imran foresees the positive momentum of corporate earnings to continue, as long the economic recovery remains intact.
“However, we recognise that there is a downside risk to this such as the resurgence of the Covid-19, which has led to conditional MCO (CMCO) being implemented in the Klang Valley.
“Nevertheless, for now, we believe the economic impact of the CMCO is limited, given that it is less restrictive than the targeted enhanced movement control order or TEMCO.”
The bank also provides rescheduling and restructuring options for customers not impacted by the loss of jobs or facing reduced monthly income but need to re-strategise their finances.
Bank Islam said it was committed to assist customers in navigating through current trying times, particularly following the recent spike in Covid-19 positive cases nationwide.
Chief executive officer Mohd Muazzam Mohamed said the bank had been consistently approaching its business banking customers who need a more customised plan in servicing their financing since the beginning of the automatic moratorium in April this year.
He said to date, the bank's approval rate for business banking customers' remained at almost 100 per cent.
The bank has also approved 100 per cent application from its retail customers, of which 43 per cent were approved under a further three-month deferment plan and the remaining 57 per cent approved under a six-month instalment reduction plan.
''The bank is also actively engaging with our affected customers who have yet to submit the required supporting documents for their targeted repayment assistance application. We have also simplified the process to help those in need.
''We are aware that there are customers who may continue to experience cash flow pressures amid the pandemic and need further support in managing their finances. Bank Islam is always open to discuss and provide our best financial solution offerings in assisting them to overcome these difficulties,'' he said in a statement today.
Mohd Muazzam said the bank was proactively reaching out to potentially vulnerable customers, especially in the sectors heavily impacted by Covid-19.
''They include those working in the tourism, hospitality and airline sectors. It is part of our responsibility to help them manage their financial obligations as they strengthen their finances.
''Even though the six-month automatic moratorium period has ended at the end of September 2020, Bank Islam continues to assess applications from affected customers who require repayment assistance,'' he said.
As of today, 98 per cent of Bank Islam's customers have resumed servicing their financing commitment after September.
The bank said the repayments ensure that more liquidity and resources would be available for it to continue providing aid to other individuals and businesses.
FSBM was publicly reprimanded for failing to issue its annual report that included the annual audited financial statements together with the auditors’ and directors’ reports on or before Oct 31, 2018. FSBM had only issued the AR 2018 on Dec 31, 2019, after a delay of 14 months.
According a statement by Bursa, the delay in issuance of the AR 2018 was mainly due to the disagreement with the external auditors in issuing a disclaimer opinion for the audited financial statements 2018, which would have resulted in the company triggering the prescribed criteria under paragraph 2.1(d) of Practice Note 17.
“The external auditors had on Oct 31, 2018 issued the disclaimer on the basis that they were unable to obtain sufficient appropriate audit evidence to satisfy themselves as to the appropriateness of the carrying amounts of the trade and other receivables due from Technitium Sdn Bhd of RM7.6 million and a business consultant of RM3.2 million in accordance with the Malaysian Financial Reporting Standards and whether any adjustments to these amounts were necessary.”
FSBM was also required to review and ensure the adequacy and effectiveness of its financial reporting function. In addition, FSBM must ensure all its directors and relevant personnel attend a training programme in relation to compliance with the requirements pertaining to financial statements.
“Bursa Malaysia Securities views the contravention seriously as the timely submission of financial statements is one of the fundamental obligations of listed companies and is of paramount importance in ensuring a fair and orderly market for securities traded on Bursa Malaysia Securities and necessary to aid informed investment decisions,“ the regulator said.
To meet the need, economists have called for a reduction in taxes and other forms of tax stimulus measures to be incorporated in the upcoming Budget 2021.
While the government has introduced five rounds of stimulus packages totalling RM305bil, on top of Bank Negara’s move to lower the overnight policy rate to induce borrowings, experts feel more can be done by the government despite concerns of limited fiscal space.
Speaking with StarBiz, Socio-Economic Research Centre (SERC) executive director Lee Heng Guie (pic below) said Budget 2021 should introduce “measured tax stimulus”, given the uneven economic and business recovery pace.
This is important as Malaysia is currently into the third wave of the Covid-19 pandemic that will further undermine consumer sentiment and business confidence.
Lee suggested a tax holiday for individuals with an annual chargeable income bracket of RM100,000 to RM150,000.
He also said the government could consider a reduction in the personal income tax rate and selected personal tax relief for middle-income wage earners and below.
In addition, a sales tax reduction or exemptions for big-ticket items and consumer durables to encourage consumer spending could be considered.
As for businesses, especially the small and medium enterprises (SMEs), Lee said there needs to be tax incentives, financial relief and assistance to ease the 3Cs – cash flow, cost and credit.
“These include an extension of the wage subsidy programme, electricity tariff discounts, the exemption of foreign workers’ levy as well as the extension of rental rebates.
“For SMEs, the income tax rate for chargeable income up to the first RM600,000 should be reduced by 1%-2% to 15%-16% from the 17% currently, ” he said.
While these tax measures may result in lower tax revenue for the government in the short term, Lee believes the resulting economic and business revival will lead to increased revenue for the government in due course.
Sunway University professor of economics Yeah Kim Leng, (pic below) however, felt the government was unlikely to introduce tax cuts, given the country’s expected revenue shortfall and continuing fiscal deficit position.
“Widening the tax bracket will enhance the disposable income of the lower middle-income households.
“Last year, the tax rate on those earning above RM2mil was increased from 28% to 30%. We may yet again see the top 20% (T20) group being called upon to shoulder an additional tax burden, ” he told StarBiz.
Asked if the government should consider imposing a windfall tax on glove makers to raise more tax revenue, Yeah said such a move would have undesirable consequences.
These include deterring the firms from capital investment and business diversification and engaging in unproductive tax avoidance activities.
“It also raises an equity issue since the firms are already being taxed as they could argue for symmetrical fiscal support when the industry is in the doldrums, ” he said.
For context, glove makers have recorded Astronomical growth in net profits following the Covid-19 outbreak, thanks to the sharp surge in glove demand.
This has sparked speculation that the government may impose a windfall tax to partially offset the drop in oil- and tax-related revenue.
Analysts expect the glove manufacturing industry to continue enjoying strong bottomline growth in 2021 and even in 2022, if the development of the coronavirus vaccine drags on.
The long-term impact of a windfall tax could be counter-productive
RHB Research Institute had said earlier that chances were low for the windfall tax.
It pointed out that up to mid-October, there had been no consultations between the authorities and industry representatives to discuss the implementation of such a tax.
“The rubber glove industry has been paying corporate taxes and foreign worker levies to the government.
“In line with the higher profits within this sector, we estimate that the tax paid to the government should be at least triple the amount paid during pre-Covid-19 times.
“Lastly, imposing a windfall tax may be counter-productive, as it could encourage local glove makers to adjust their future expansion plans overseas to countries like Thailand and China, ” it said in a report dated Oct 19.
On the contrary, SERC’s Lee did not discount the possibility of a windfall levy on the rubber glove sector.
While the move could be seen as a revenue stabiliser in times of fiscal stress, Lee cautioned that the long-term impact could be counter-productive.
“Proponents would argue that the windfall tax penalises companies that are already paying large amounts of tax and planning to invest billions in the expansion of plant capacity.
“It would sour Malaysia’s investment climate in a global race for resource-based investments.
“The timing of introducing new taxes and the sequencing of tax reforms must be implemented in line with the state of economic and business conditions, ” he said.
According to Lee, the Windfall Profit Levy Act 1998 allows the government to slap a windfall tax on businesses enjoying excessive or supernormal profits to help plug the tax revenue gap and keep a manageable fiscal deficit.
“The windfall taxes were imposed on the plantation sector during the 1997-1998 Asian Financial Crisis due to the substantial gains brought about by the sharp depreciation of the ringgit.
“During the 2008-2009 Global Financial Crisis, a 30% windfall profit levy on independent power producers was structured on a return on assets in excess of 9%, ” he noted.
Despite the concerns on low tax collections, RHB Research Institute pointed out that the government would benefit from the digital tax and the higher sin taxes on cigarettes and alcoholic beverages.
“The digital tax is expected to rake in about RM300mil this year. While this is positive for the government’s coffers, it is well below the RM2bil to RM4bil previously estimated by the market.
“Nevertheless, we expect the digital tax collection to grow by 9% this year, given the strong and steady growth of Malaysia’s digital economy, ” it said.
The research house added that sin tax collections could be higher, given that the authorities’ focus is tilted towards curbing the sizeable shadow economy.
“The government has proposed stronger penalties on illegal gambling activities, which could lead to higher collections through returning legal gambling market share, ” it said.
This was a key concern raised during CGS-CIMB Research’s roadshow from Oct 7-9 involving 46 participants from 13 asset management companies.
“We sensed that the main reason why investors have not increased their holdings in banks is their concern over a possible rise in gross impaired loan (GIL) ratio in the first half of 2021 following the end of the targeted loan moratorium.
“However, we think an economic recovery in 2021 – our economist projects gross domestic product growth of 7.5% – would help to limit any increase in the GIL ratio, as this could lower the unemployment rate and improve business revenue, ” the research house stated in a note.
CGS-CIMB Research forecasts the banking industry’s GIL ratio to increase from 1.4% as at end-Aug 2020 to 1.7% by end-2020 and 2% by end-2021.
A statement by House of Representatives speaker Nancy Pelosi that a stimulus deal must be finalised by tomorrow has helped to ease market jitters that were worsened by the surging Covid-19 cases in Europe and most US states.
On the domestic front, the FBM KLCI rose by 14.27 points or 0.95% to 1,518.11 yesterday.
This compares with the 26.6 points decline last week witnessed by the 30-stock index on a week-on-week basis.
Although the week has begun on a positive note, experts remained cautious on Bursa Malaysia’s outlook.
According to a bank-backed brokerage, the FBM KLCI is affected by downside bias amid spiking Covid-19 cases and domestic political tussles.
The brokerage said the FBM KLCI’s near term outlook has turned negative, unless it stages a swift retake above the 50-day simple moving average resistance level near 1,530 points.
In the event the index fails to make the swift retake, it could be potentially “reignite another selloff towards the 1,488,1, 474 and 1,461 territory”.
Sector-wise, major beneficiaries from the ongoing second wave of Covid-19 in Malaysia are gloves, technology, telecommunications and courier while sectors most vulnerable appear to be aviation, retail, food and beverages, gaming, malls and hotels, ” the brokerage said in a note.
According to Kenanga Research senior analyst Goh Yin Foo, the FBM KLCI faces a downward bias, pointing out that there is a dearth of fresh catalysts for the stock market.
Goh said the tug-of-war between the bulls and the bears dragged on and this would likely result in the FBM KLCI trading range-bound for the time being.
“For the week ahead, investors will still be monitoring the local Covid-19 situation and political scene for possible stock market implications, ” said Goh.
Meanwhile, TA Securities Research said the FBM KLCI was bogged down by renewed bearish momentum flashed by technical indicators.
Following the 26.6 points drop last week, the index is expected to extend its downward correction this week.
“Domestic political uncertainties, resurgent Covid-19 infections and fresh lockdown measures in multiple districts and areas in Selangor, Klang Valley and other states are the main factors dampening market sentiment.
“Nonetheless, the bright spot should continue to be the healthcare sector, with rubber gloves, personal protective equipment and vaccine-related stocks likely to benefit from a protracted virus pandemic to attract strong bargain hunting interest.
“Defensive banking, gaming, and utility related stocks such as AMMB Holdings Bhd, CIMB Group Holdings Bhd, RHB Bank Bhd, Axiata Group Bhd, Digi.com Bhd, Genting Bhd, Genting Malaysia Bhd and Tenaga Nasional Bhd should continue to attract bargain hunters, ” it said in a note.
On top of the market uncertainties, Bursa Malaysia was affected by the continued outflow of foreign funds.
In the Oct 12-16 week, net selling by foreigners widened to RM237.09mil compared with RM28.38mil outflow in the preceding week, MIDF said in its weekly fund flow report.
Cumulatively for October, foreign investors were net sellers to the tune of RM809.38mil. Year-to-date up to Oct 16, foreign net selling has reached RM22.59bil worth of equities on Bursa Malaysia.
Last week, MIDF Research pointed out that retailers were net buyers of RM133.15mil worth of equities, with local institutions at RM103.96mil net during the same period.
This marked the fourth consecutive weeks of local institutions as net buyers on Bursa Malaysia.
MIDF Research noted that after three consecutive weeks as net sellers, last week saw retailers as net buyers.
“This is a potential signal for the return of buying appetite for retailers with bargain hunting activities, renewed interest in glove stocks with the surge in Covid-19 cases and some political uncertainty subsided, ” according to the research house.
AFTER a dip in headline inflation in August, the September Consumer Price Index (CPI) numbers will be watched closely. The Statistics Department is expected to release the CPI on Wednesday.
The CPI for August fell 1.4% to 120.1 from 121.8 a year ago, mainly due to lower transport and fuel prices but food prices continued to increase.
In monthly terms, however, the August CPI reading increased 0.2% from July, according to the department. Year-to-date, the CPI reading for January to August 2020 decreased 1% when compared to the same period a year ago.
Meanwhile, Bank Negara will also be releasing its international reserves figures as at Oct 15 on Thursday.
The international reserves of Bank Negara amounted to US$105bil as at Sept 30. The reserves position is sufficient to finance 8.4 months of retained imports and is 1.1 times total short-term external debt.
A slew of corporate earnings are expected to be announced this week including by Axis Real Estate Investment Trust and Pavilion Real Estate Investment Trust.
China 3Q GDP
CHINA’S gross domestic product (GDP) will be out today together with September data on industrial production, retail sales and fixed-asset investment. China will also announce its October loan prime rates (LPR) fixing on Tuesday.
China’s economic growth is expected to have accelerated in the third quarter (Q3), with IHS Markit projecting the GDP to have expanded at a 5.9% annual rate.
ING Asia senior economist Prakash Sakpal opined that China’s Q3 GDP performance should be better than that of Q2, imparting upside risk to the house forecast of 2.5% year-on-year GDP growth in the last quarter (3.2% in Q2).
ING does not see any reason for the People’s Bank of China (PBoC) to alter the current monetary policy setting.
UOB Global Economics and Markets Research expects a growth of 4.9% year-on-year while Bloomberg consensus forecast for Q3 GDP is at 5.5% year-on-year.
Additionally, UOB expects the PBoC to continue to hold rates into 2021.
Trade data
TRADE data is due in Japan, Taiwan and Thailand this week.
IHS Markit said Taiwan’s export orders and Thailand’s trade figures will be closely scrutinised for clues into global trade performance.
This followed global PMI data indicating a revival of global goods trade during September.
ING said taking a cue from firmer exports elsewhere in the region and look for the same in Japan and Thailand, though their export growths are yet to turn the corner into positive territory.
It added that Taiwan’s export orders would be a key indicator of electronics-led recovery coming into the final quarter of the year.
Under the campaign, customers are offered to place a fixed deposit and help in extending financial relief to those whose incomes have been affected by the Covid-19 pandemic.
The bank said members of the public can participate in this social cause by making a minimum placement of RM1,000 into an IFD-i account for six months.
While customers will receive the prevailing board rate for their deposits, Maybank Islamic will separately contribute 0.3 per cent per annum to a special account, which is the Social Impact Assistance Account, for every deposit placement made during the offer period.
This special account is designated to provide support to beneficiaries comprising Maybank Islamic customers identified and assessed by the bank to be in dire need of financial
assistance due to a loss of income or employment as a result of the pandemic.
Maybank Islamic chief executive officer Datuk Mohamed Rafique Merican said this initiative is in line with Maybank's ongoing efforts to provide assistance to its customers who are impacted by the Covid-19 pandemic.
''The impact of the virus has been devastating for so many and we believe that we are in a unique position to assist those who are still rebuilding their lives at this time.
''Hence, we have come up with this initiative to enable members of the community who also share the same sentiments to join hands with us,'' said Mohamed Rafique.
He said the social impact deposit is very much aligned with the Maybank group's sustainability agenda and commitment to embedding good environmental, social, and governance (ESG) practices within its operations and deliver meaningful solutions to the community.
''Given our mission is to humanise financial services, we constantly challenge ourselves to see how we can also make a positive impact on the community and environment through
our products and services.
''The social impact deposit initiative provides us an avenue to do so, and work with like-minded people to help our fellow citizens navigate this crisis together,'' he said.
According to Maybank, the social impact deposit offer period will be from October 15 to December 31, 2020 and customers can make their placements via Maybank2u or at any Maybank or Maybank Islamic branches in Malaysia.
The bank said this initiative is one of the many Maybank has introduced to support the community in these trying times.
''Other campaigns include the Mercy Malaysia Covid-19 Fund, the People's Campaign via crowdfunding platform MaybankHeart to provide support in collaboration with non-government organisations (NGO) who assist Malaysia's most at-risk communities, and supporting the Maybank Women Eco-Weavers, who during the pandemic have produced sustainable and reasonably-priced face masks for their communities,'' it added.
The central bank ran a stress test, under an assumed scenario of economic and financial shocks due to the pandemic, and found that overall impairments are projected to rise above 4% of loans by end-2021.
In its “Financial Stability Review – First Half 2020” report issued yesterday, Bank Negara said the test takes into account the effects of the blanket moratorium implemented in April and the subsequent targeted repayment assistance announced by banks in August.
Business impairments are expected to be driven by defaults of maturing bullet repayments of firms operating in vulnerable sectors, mostly in the services industry which is expected to experience a slower recovery, as well as exposures to several large borrower groups with weaker financials.
Meanwhile, household loan impairments are projected to double, from what are already historically low levels.
Higher household impairments are expected to emerge in the second half of 2021, when the extended repayment assistance programmes, that will remain through the first quarter of 2021 for individuals with a loss in income, ends.
“Overall, credit costs to banks could rise to RM29bil (1.4% of total loans) over 2020 and 2021.
“These projections assume conservative estimates of the share of loans under bespoke targeted repayment assistance (mainly for businesses) based on restructuring and rescheduling trends observed at the onset of the pandemic.
“With uncertain conditions persisting, banks have been much more proactive in extending repayment assistance, as seen in recent months. This was not taken into account in the simulations, ” it said.
Bank Negara said that since July, the number of businesses receiving repayment assistance from banks has increased seven-fold.
This would improve debt serviceability and mitigate credit losses.
It also pointed out that in anticipation of higher credit losses, banks have been shoring up their buffers, adding RM2.7bil to provisions in the first half of 2020.
“At an individual bank level, additional provisions by banks have already risen to an average of 16% of banks’ projected stressed credit losses over a 12-month horizon, based on their internal stress tests.”
It said the provisions could increase as banks get a better view of credit developments, with assessments done after the end of the blanket moratorium.
“The gradual build-up of provisions will also ensure that banks maintain healthy buffers to absorb losses and support continued lending to the economy, ” the central bank pointed out.
The impact of stressed credit losses on banks’ solvency would result in the aggregate total capital ratio (TCR) and common equity Tier-1 (CET1) capital ratio declining by two percentage points (ppts) and 1.4 ppts, respectively, over the next 12 to 18 months.
Under the bottom-up scenario analysis, the aggregate TCR and CET1 capital ratio as reported by commercial and Islamic banks are projected to decline by a larger extent of 3.4 ppts and 3.1 ppts, respectively.
Bank Negara said that by applying a sensitivity analysis to these results, individual banks are projected to have adequate buffers above the regulatory minimum capital requirement to withstand further losses associated with default rates that are eight times higher than the banks’ historical default rates.
These multiples are significantly more severe than Malaysia’s worst experience so far – the Asian Financial Crisis – when overall impairments rose by three to five times.
The report, titled “Welfare in Malaysia Across Three Decades, ” also noted the wide variation of savings from household income between income groups.
The top 10% of households had gross savings of RM12,653 per month on average, while the bottom 10% had only RM200 per month on average.
On a net basis, some households might have negative monthly residual income as the amount in gross term was before the deduction of obligatory payments such as social security contributions and inter-household transfers.
The report pointed out that many households remain precariously vulnerable, although the absolute poverty rate had declined to 5.6% (405,000 households) in 2019 from 7.6% in 2016. However, there has been little progress in reducing relative poverty, with an incidence of 16.9% (1.2 million households).
This meant that 11.3% (835,000 households) had incomes not far above the absolute poverty line income while remaining far below the average living standard.
These households are vulnerable to falling back into absolute poverty in case of catastrophic events such as the Covid-19 pandemic or a job loss. Also, the increase in household income has been accompanied by higher spending on eating out and communication-related goods and services.
These items, long seen as discretionary, have increasingly become necessary and put further pressure on the cost of living.
In recent years, household income growth has also slowed in tandem with the country’s slowing economic growth.
The report also noted that there was some convergence in average household incomes between ethnic groups and states over the last three decades.
However, gaps remain, as the convergence was driven by increased cash transfers and self-employment income, rather than wage growth.The long-term trend in income inequality, as measured by the Gini coefficient, also moderated from 0.442 in 1989 to 0.407 in 2019.
Bumiputra income growth has been faster than other ethnic groups, leading to smaller ethnic gaps. However, bumiputra economic activities remained less diversified and narrower than that of the non-bumiputra.
The report also pointed out the broad progress achieved in the country over three decades, with average real household income in Malaysia more than tripled from RM2,580 in 1989 to RM7,901 in 2019, while median income rose from RM1,801 to RM5,873.
Household income, as a share of gross domestic product (GDP), increased to 45.7% in 2019 from 35.9% in 1989.
The absolute poverty rate fell during the three decades from 16.5% in 1989 to 5.6% in 2019. KRI said its findings underscored the critical and urgent need to transform the Malaysian economy to elevate the collective welfare and incomes of households.
It suggested creating more high paying jobs in higher value-added activities, scaling up economic empowerment initiatives to assist low-income and vulnerable households, and increasing welfare spending and broadening the social protection system to include more vulnerable households.
KRI chairman Tan Sri Nor Mohamed Yakcop (pic) spoke about “a sense of decency” in the country and how this had reduced inequalities in society since independence in 1957.
“Based on this value, we built schools and hospitals, especially in rural areas, as well as boarding schools to enable children from the villages to emerge from poverty and join the professional class.
“We succeeded in increasing the number of bumiputra professionals from only 107 individuals in 1970 to 43,367 in 2016, ” he said in his speech before the online presentation of the KRI report to the media yesterday.
Nor Mohamed said that in addressing different forms of deprivation, the country should strive towards achieving decent rather than minimum living standards.
“For example, a single mother with two children who has to work two jobs. Her income may be higher than the poverty line, but she cannot give the best attention to her children.”
“Borrowers/customers in these areas who face difficulties in making loan/financing repayments should immediately contact their banks to request for repayment assistance, ” the Association of Banks in Malaysia (ABM) and Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) said in a statement.
They said banks are ready to facilitate requests for repayment assistance to suit borrowers'/customers’ financial circumstances.
“Borrowers/customers can contact their banks via email or telephone if they are unable to have face-to-face engagements due to restriction of movement.
“For the safety of banks’ borrowers/customers and employees, banks in the CMCO areas are operating with heightened vigilance and adherence to the Covid-19 standard operating procedures (SOPs), ” they said.
ABM and AIBIM advised borrowers/customers in the affected areas to check on their respective banks' websites for information on any changes in operating hours or arrangements for over-the-counter services.
Borrowers/customers can also continue to perform banking services at all self-service terminals, such as automated teller machines (ATMs) and cash deposit machines (CDMs) located in the CMCO areas.
For more details on repayment assistance, the public can also contact ABM Connect via the ABM website: https://www.abm.org.my/eabmconnect or AIBIM at 03-2026 8002/8003 or via email: staff@aibim.com
Borrowers/customers who are still facing difficulties after consultation with their banks can contact BNMTELELINK at bnmtelelink@bnm.gov.my or call 1-300-88-5465.
Alternatively, borrowers/customers can also seek guidance and explore other options for assistance with AKPK by calling (03) 2616 7766.
