This article first appeared in The Edge Malaysia Weekly on July 29, 2019 - August 4, 2019

As Malaysia celebrates the installation of the 16th Yang di-Pertuan Agong — Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah of Pahang — on Tuesday, investors will be on the lookout for news flow about the US and China resuming trade talks in Shanghai. The talks — which broke down in May and resulted in the US hiking tariffs on US$200 billion worth of Chinese goods — were revived following a recent meeting between US President Donald Trump and Chinese President Xi Jinping.

At the same time, China is hosting a ministerial-level summit in Beijing as part of its drive to conclude by year end the Regional Comprehensive Economic Partnership (RCEP) trade agreement with 10 Asean countries plus Japan, South Korea, Australia, New Zealand and India.

Financial markets will be counting the hours until the US Federal Reserve’s anticipated rate cut, which will be made public at about 2am local time on Thursday. Expectations are for a 25-basis-point rate cut by the US Federal Open Market Committee (FOMC), with only a minority of experts saying economic data does not justify reducing interest rates just yet, although stock markets would certainly welcome it. Others are even betting on a 50bp cut.

The Fed rate cut — if it happens — will be the first since rates were lowered to zero in December 2008, in response to the global financial crisis. The FOMC, which began raising rates in December 2015, affirmed an end to its hawkish stance when keeping rates unchanged at 2.25% to 2.5% in March this year.

The Bank of Japan and Bank of England also have rate decisions on Tuesday and Thursday respectively. While rates are expected to be kept unchanged, investors will be looking to glean any forward guidance from the central bankers. Last Wednesday, the UK’s new prime minister, Boris Johnson, promised that Brexit will be done by the current Oct 31 deadline.

Other key regional economic releases include China’s latest monthly Purchasing Managers Index report and Taiwan’s second-quarter gross domestic product on Wednesday.

Here, at home, economic data releases this week include the Producer Price Index for June on Wednesday and June export data on Friday.

Economists will be looking out for signs of Malaysia benefiting from trade diversions stemming from the ongoing US-China trade tensions. Exports rose 2.5% year on year in May, improving from 1.1% y-o-y in April, on the back of improved shipments of palm oil-related and non-electrical and electronic products. Economists expect low single-digit export growth figures for the full year, down from the stellar 6.7% average last year.

On the corporate front, AMMB Holdings Bhd is holding its annual general meeting on Wednesday, and Jadi Imaging Holdings Bhd an extraordinary general meeting on Friday. Datasonic Group Bhd’s AGM is on Thursday while shareholders of XOX Bhd will convene at an EGM on Wednesday.

Notable earnings releases this week include Maxis Bhd’s 2Q results on Wednesday.

Investors will also continue to react to the surprise settlement agreement reached between Genting Malaysia Bhd and Walt Disney Co on the former’s much delayed opening of its outdoor theme park. While the outdoor theme park will be renamed, its offering may well be improved as it will feature some of the popular characters from 21st Century Fox and possibly a number of Marvel’s — another Disney-owned brand — The Edge Financial Daily reported last Friday. At the time of writing, Genting had yet to provide details on which non-Fox intellectual properties will be included in the theme park at its popular hilltop resort about an hour’s drive from Kuala Lumpur.

Bursa Malaysia will see its seventh listing on the ACE Market this year with the listing of Tashin Holdings Bhd on Thursday. The LEAP Market has seen 10 listings this year while there were three on the Main Market.

Over at the Kuala Lumpur High Court, the corruption trial of former prime minister Datuk Seri Najib Razak, involving RM42 million at former 1Malaysia Development Bhd (1MDB) subsidiary SRC International Sdn Bhd, resumes on Monday. There will also be a court update on the forfeiture suit by the Malaysian Anti-Corruption Commission seeking to recover 1MDB-linked monies from several parties, including Umno.

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