This article first appeared in The Edge Malaysia Weekly on December 7, 2020 - December 13, 2020
Weeks after the implementation of the Conditional Movement Control Order (CMCO) to curb the spread of Covid-19, attention over the weekend will be on whether there will be another extension beyond Dec 6.
The current restrictions put in place since Oct 14 ban interdistrict and interstate movements — except for work or emergencies — in Selangor, Putrajaya, Kuala Lumpur, Sabah, Labuan, Kelantan, Perak, Penang and Negeri Sembilan.
On Nov 21, the CMCO imposed on four states — Kedah, Melaka, Johor and Terengganu — was lifted, with the exception of certain districts, including Kulim in Kedah and Kota Tinggi and Mersing in Johor.
A CMCO extension or otherwise will determine whether the hearing of the RM1 million corruption case involving former federal territories minister Datuk Seri Tengku Adnan Tengku Mansor, popularly known as Ku Nan, will be able to proceed before High Court judge Mohd Nazlan Mohd Ghazali on Monday. The trial, which was slated to begin on Nov 23, was postponed because of the implementation of the CMCO.
The trial of former prime minister Datuk Seri Najib Razak and former 1Malaysia Development Bhd CEO Arul Kanda Kandasamy — both jointly charged with the tampering of the Auditor-General’s final 1MDB audit report — is also expected to resume this week.
It will be a quiet week ahead on the economic calendar, with Malaysia releasing its October industrial production data on Friday (Dec 11). The data will give an early indication of the country’s economic growth in the final quarter of 2020. The industrial production index rose 1% year on year in September, driven by growth of 4.3% in the manufacturing index. This was offset by declines in the mining and electricity indices.
Regionally, attention will be on China’s trade data for November and official reserves on Monday, followed by its November consumer price index and producer price index (PPI) data on Wednesday. According to a Bloomberg poll, China’s inflation may ease to 0.1% y-o-y in November from 0.5% in October, while the decline in the PPI may improve to -1.8% y-o-y from -2.1% in October. China is also expected to release its November money supply and renminbi loans data between Dec 10 and 15.
Taiwan will release its trade figures for November on Monday, followed by its November CPI and wholesale price index data the next day. India’s October industrial production figures will be out on Friday.
The Philippines is set to release its October trade data on Thursday. ING senior economist for Asia Prakash Sakpal says Philippine exports have been the weakest in Asia this year, with a 14% y-o-y decline in the first nine months, a trend that is likely to continue for the rest of the year. “Our house forecast for October is -8%,” he says in a Dec 3 report.
According to UOB Global Economics & Markets Research, it will be a short work week for Thailand as the country observes King Bhumibol’s birthday and Father’s Day on Monday, commemorates Constitution Day on Thursday and a specially declared holiday on Friday. The Philippines will also celebrate the Immaculate Conception Day on Tuesday, and Myanmar will hold its National Day celebrations on Wednesday. Wednesday has also been declared a holiday in Indonesia, owing to the regional and local elections.
In developed markets, the data focus in Europe this week will be on industrial production, including Germany’s October IPI data on Monday, France and the UK on Thursday, and Italy on Friday.
US releases include its October consumer credit on Monday and the National Federation of Independent Businesses Small Business Optimism Index for November on Tuesday.
In a report last Friday, UOB notes that there are two G7 central banks’ monetary policy decisions this week: the Bank of Canada on Wednesday and the European Central Bank (ECB) on Thursday. “According to the latest Bloomberg poll, all 20 analysts surveyed expect Bank of Canada to maintain its policy rate at the record-low 0.25%. Attention will be on the central bank’s economic outlook, which could see a significant improvement, owing to the Covid-19 vaccine developments,” it says.
As for the ECB, UOB sees it extending and increasing the Pandemic Emergency Purchase Programme in December. “The implementation period could stretch an extra six months beyond the current guidance that purchases will be made until at least June 2021, with reinvestment at least to the end of 2022.”
Japan is set to release its revised third-quarter GDP estimate this week. “The second GDP estimate typically doesn’t differ much from the first (+5% quarter on quarter in 3Q). So, the markets are likely to pay more attention to indicators on growth in the current quarter. There are plenty of these due next week, including October labour earnings, household spending, machinery orders and the current account,” says UOB.
On the corporate front, Top Glove Corp Bhd is set to announce its first-quarter financial results for the period ended Nov 30 on Wednesday. In full-year FY2020, the world’s largest glove maker saw its net profit surge 412% to post a record RM1.87 billion on higher-than-expected average selling prices and longer demand lead times. All eyes will be on whether Top Glove repeats this impressive feat in 1QFY2021. Gamuda Bhd will hold its annual general meeting on Tuesday via a video conference call.
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