(Updated)

Teh Hong Piow says Malaysia's low interest rates to persist into foreseeable future

Teh Hong Piow says Malaysia's low interest rates to persist into foreseeable future
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KUALA LUMPUR (March 4): LPI Capital Bhd chairman Tan Sri Dr Teh Hong Piow said Malaysia’s low interest-rate environment is expected to persist into the foreseeable future as the Covid-19 pandemic and effectiveness of global efforts to contain its spread continue to dominate the world economic landscape.

Teh said this in insurance company LPI’s latest annual report, which was filed with Bursa Malaysia yesterday. LPI wholly-owns Lonpac Insurance Bhd. 

"We expect the low interest-rate environment to persist into the foreseeable future, which may encourage greater sales of property and motor vehicles, which are important portfolios for Lonpac,” said Teh, who is also Public Bank Bhd's founder and chairman emeritus.

In LPI’s annual report, Teh said the announcement of several Covid-19 vaccines towards the end of 2020 is a promising development which, if effective, will do much to contain the virus and restore global economic activity. 

He said there is a general consensus that there will be a reversal of the economic contraction of 2020 in 2021.

"The recovery of external demand will be a key catalyst for the recovery of the Malaysian economy, which the government has projected to grow between 6.5% and 7.5%. However, it will be largely dependent on the ability of governments around the world to contain the spread of the virus, and a recovery in demand in their respective nations. 

"If this does come to pass, this will be a positive catalyst spurring greater economic activity in Malaysia, which will in turn increase demand for insurance products. On the local front, we are heartened by the measures announced under Budget 2021 which sees greater fiscal stimulus being injected into the local monetary system. 

"These, as well as the announcement of new infrastructure projects, will be a positive catalyst for local economic activity and increase the circulation of funds within the local economy,” Teh said.

On Bursa today, LPI’s share price had fallen two sen or 0.14% to RM13.78 as at the time of writing, giving it a market value of about RM5.49 billion.

LPI has 398.38 million issued shares.

Chong Jin Hun