KUALA LUMPUR (Jan 11): The continued overall positive readings from RAM Holdings Bhd's quarterly business index RAM Business Confidence Index (RAM BCI) across both corporates and small and medium enterprises (SMEs) going into 2018, suggest the economic environment in Malaysia remains sustainable on its current track, the ratings agency emphasized. 

RAM found from the survey that capacity building activities ie. business expansion and capital investment, as well as hiring intentions of Malaysian firms, continue to stand out as the most positive aspects of the index. 

RAM group chief executive officer Datuk Seri Dr K. Govindan said optimism among Malaysian firms corresponds to overall positive view on global economic growth for 2018. 

“The BCI results indicate that private investment activities would remain resilient heading into 2018, while the slight uptrend in the Corporate Hiring Sub-Index suggests more hiring and capacity building in 2018,” Govindan told reporters during a media briefing today. 

However, he noted there was a slight downside prospects in business performance among SMEs in relation to corporate firms. SMEs were observed to face larger issues with revenue collection punctuality and visibility on future contract awards, as well as being constrained by limited resources and lack of scale. 

“This indicates the need for continued close engagement with SMEs to help these firms gain better access to funding and to raise their participation in international trade,” Govindan added. 

With the benchmark neutral level at 50, findings from the RAM BCI indicates consistent positive sentiment readings in both corporates and SME indices of 55.6 and 52.4 respectively, as firms remain confident about their business performance prospects going into the first and second quarter of 2018.  
 
This is in line with RAM’s expectations of a sustainable recovery momentum continuing in 2018, coming off from the rebound in gross domestic product (GDP) growth of 5.8% expected for 2017. 

“A moderate albeit robust GDP growth is anticipated this year at 5.2%, supported by the strengthening domestic demand and resilient external markets, as indicated by the latest positive results,” Govindan added. 

The RAM BCI surveys corporates and SMEs across five main industry segments and measures sentiments on seven key aspects of business, namely turnover, profitability, business expansion, hiring, capital investment, capacity utilisation, and access to bank financing.