The Week Ahead: PD by-election, Mahathir, Top Glove EGM in the spotlight

This article first appeared in The Edge Malaysia Weekly, on October 8, 2018 - October 14, 2018.
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It is a relatively light week for economic data releases at home but there will be much news on the political front ahead of this Saturday’s Port Dickson by-election, where seven candidates, including PKR’s Datuk Seri Anwar Ibrahim, are vying for the parliamentary seat.

On Tuesday, investors will be keeping an eye out for any major announcements by Prime Minister Tun Dr Mahathir Mohamad, who is scheduled to speak at two conferences in Kuala Lumpur. In the morning, he will deliver the keynote address at an investor conference themed “Malaysia: A New Dawn” and, later in the evening, the closing address at the Khazanah Megatrends Forum 2018.

Anwar is also expected to deliver a special address at the investor conference.

Over in PD, Anwar’s former political aide Mohd Saiful Bukhari Azlan is also contesting in the by-election, as is former Umno leader Tan Sri Mohd Isa Abdul Samad and PAS’ Mohd Nazari Mokhtar. Other independent candidates are Stevie Chan Keng Leong, Lau Seck Yan and Kan Chee Yuen.

It will be a closely watched election as Anwar, the prime-minister-in-waiting, needs a seat in parliament in order to take over from Mahathir. The latter has promised to step down after two years.

In Asia, key central bank heads and finance ministers will descend on Bali, Indonesia, this week for the World Bank-International Monetary Fund (IMF) 2018 meeting. While the event kicks off on Tuesday, the plenary session will begin only on Oct 12 and conclude two days later.

Bank of England governor Mark Carney, who is also the outgoing Financial Stability Board chair, and Federal Reserve Bank of New York president John Williams are among those expected to attend.

In Malaysia, the Department of Statistics will release August industrial production and manufacturing sales data on Thursday. In July, the Industrial Production Index, which measures real production output of manufacturing, mining and electricity, increased by 2.6% year on year.

China gets back to work on Monday after its Golden Week national holiday last week. Among its key releases are September trade data (Friday) and the latest Caixin Composite Purchasing Managers’ Index (Monday). Money supply and aggregate financing data for September will also be out this week.

China’s trade data will be closely watched for an indication of how the world’s second largest economy is doing amid an intensifying trade war with the US.

The Caixin Composite PMI, which covers both the manufacturing and service sectors, weakened in August. Standing at 52, the index is at its lowest in five months. The 50-mark separates growth from contraction.

Japan’s markets will close Monday for a national holiday, while Taiwan’s will close on Wednesday. South Korea’s will be closed Tuesday for the Hangul holiday.

Singapore is the only major Asian central bank with a monetary policy decision. The Monetary Authority of Singapore (MAS) is expected to release its October monetary policy statement on Friday.

UOB Global Economics & Markets Research, in a note last Friday, says: “We expect the MAS to keep the existing stance of ‘a modest and gradual appreciation path of the Singapore dollar NEER (nominal effective exchange rate) policy band’ unchanged (UOB estimate: 0.5% per annum) and also keep the midpoint and bandwidth of the policy band unchanged. Our view is based on concerns about the rising external risk environment and we believe that MAS will err on the side of caution. Even though domestic core inflation is higher, it remains within MAS forecast range.”

Also out on Friday will be Singapore’s preliminary third quarter gross domestic product data. Economists expect 3Q GDP to slow from the previous quarter’s 3.9% year-on-year growth.

Over in the US, the main focus is likely to be on September price data, including Producer Price Index (Oct 10), Consumer Price Index (Oct 11) and import and export prices (Oct 12).

The US corporate earnings reporting season will gather pace mid-week, with several major banks expected to release their latest numbers.

In the UK, trade data will be out on Oct 10.

On the corporate front at home, all eyes will be on glove maker Top Glove Corp Bhd, which is holding two extraordinary general meetings on Wednesday, where it is seeking, among others, to remove Low Chin Guan as a director of the company with immediate effect.

The group, which is expected to announce its full-year earnings this month, is embroiled in a legal suit over its purchase of surgical glove manufacturer Aspion Sdn Bhd.

Berjaya Sports Toto Bhd holds its annual general meeting on Friday.

Other companies with EGMs this week are Weida (M) Bhd (Tuesday) and MMS Ventures Bhd (Thursday).

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