Thursday 28 Mar 2024
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This article first appeared in The Edge Malaysia Weekly on February 24, 2020 - March 1, 2020

This week promises to be fast-paced. Amid a deluge of earnings releases, Malaysians will be waiting with bated breath for Prime Minister Tun Dr Mahathir Mohamad to announce measures to stimulate the economy on Thursday.  Businesses, especially those affected by the Covid-19 outbreak, are hoping the government will roll out measures to support them. Expectations are high, coming on the heels of Singapore’s announcement last week of S$5.6 billion in special packages to support businesses and households in the republic.

Companies listed on Bursa Malaysia that have yet to release their fourth-quarter and 2019 earnings must do so by this week. Nestlé (Malaysia) Bhd, Malayan Banking Bhd, RHB Bank Bhd, Affin Bank Bhd, UEM Sunrise Bhd, UMW Holdings Bhd, Telekom Malaysia Bhd, AirAsia X Bhd, AirAsia Group Bhd and Genting Malaysia Bhd are among those releasing their quarterly numbers this week.

The impact of Covid-19 will not be reflected in their fourth-quarter earnings.

At the Kuala Lumpur High Court, the trial of former prime minister Datuk Seri Najib Razak, on charges relating to SRC International Sdn Bhd, will continue on Monday. On the same day, the RM27.2 billion 1Malaysia Development Bhd (1MDB) bond cases against Goldman Sachs (Singapore) Pte Ltd are set for mention. In December 2018, the government filed four charges against Goldman Sachs for allegedly leaving out material facts on the sale of bonds between a subsidiary of 1MDB and Aabar Investment PJS Ltd. The offences were allegedly committed at 1MDB’s premises between March 19, 2012 and Nov 11, 2013. The company was charged under Section 179 (c) of the Capital Markets and Services Act 2007, which carries a penalty of imprisonment for a term not exceeding 10 years and a fine of not less than RM1 million, upon conviction.

On Tuesday, the High Court will hear case management in a prosecution application for a joint trial as the four charges against former Goldman Sachs banker Roger Ng Chong Hwa are currently being heard by two Sessions Court judges. The trial dates have been fixed for April 13 to 15. On Dec 19, 2018, Ng pleaded not guilty to four counts of abetting Goldman Sachs over the sale of 1MDB bonds totalling US$6.5 billion by omitting material information and publishing untrue statements.

It will be a busy week on the economic calendar, too. Singapore will kick off the week with the release of its January Consumer Price Index data on Monday. The city state’s headline inflation is forecast to have risen to 0.9% in January from 0.8% in December last year, while core inflation, which excludes housing and private road transport, is likely to have edged higher to 0.8% in January from 0.7% in December, according to the median estimate in a Bloomberg survey.

On Wednesday, Singapore releases its January industrial production data. On the same day, Hong Kong will announce its gross domestic product data for 4Q2019. A Bloomberg consensus poll expects Hong Kong’s GDP to contract 2.9%, compared with a 2.8% contraction seen in 3Q2019, bringing the full-year contraction to 1.2% in last year. Hong Kong’s GDP grew 2.9% in 2018.

“The 2020 growth outlook will be the focus, along with the Budget 2020/21 announcement on the same day as the Hong Kong government is expected to announce further relief measures for the Covid-19 outbreak,” says UOB Global Economics & Markets Research in a report last Friday.

Elsewhere in Asia, The Bank of Korea (BoK) is the only major central bank in the region with a monetary policy decision this week, on Thursday. UOB Global Economics & Markets Research expects the central bank to keep its benchmark interest rate unchanged, though the new threat from Covid-19 could see the BoK exploring a further rate cut later in the first half of this year.

On Friday, India will announced its 4Q2019 GDP data, which is expected to increase at a faster 4.6% compared with 4.52% in 3Q2019, bringing full-year growth to 5% in 2019. India’s GDP grew 6.1% in 2018.

On Saturday, the focus shifts to China’s Manufacturing Purchasing Managers Index data for February. Bloomberg estimates that the manufacturing PMI will fall to 47.41 from 50 in January.

According to UOB Global Economics & Markets Research, South Korea will be the first industrial powerhouse to report trade numbers for February on Sunday. “The interest will not just be in how much exports and imports will contract, attention will be on the magnitude of the decline of imports from China as a reflection of the disruption to supply chains due to the Covid-19 outbreak,” it says.

The Philippines will celebrate the Edsa People Power Revolution holiday on Tuesday while Taiwan celebrates Peace Day on Friday.

Key things to watch out for in developed economies this week include the G20 Finance Ministers and Central Bank Governors Meeting, which will take place in Riyadh, Saudi Arabia on Feb 22 and 23.

“The main focus is expected to be the Covid-19 outbreak and, perhaps, a concerted call for policy measures to cushion the global economy,” says UOB Global Economics & Markets Research.

Japan’s monthly economic data will also be in focus this week, especially against the rising concerns of an impending recession this year. The key numbers to watch are Friday’s January retail sales and industrial production.

Back on the local corporate front, Bloom­berg data shows that companies holding extraordinary general meetings this week include Eonmetall Group Bhd (Monday), Niche Capital Emas Holdings Bhd (Wednesday), Ranhill Holdings Bhd (Thursday) and Power Root Bhd (Thursday). Companies holding annual general meetings are JCY International Bhd (Tuesday), EITA Resources Bhd (Wednesday), WZ Satu Bhd (Thursday) and Hubline Bhd (Thursday).

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