This will be a shorter work week for Malaysians as the Muslim community celebrates Hari Raya Aidilfitri on Monday and Tuesday, with no major economic data releases scheduled.
However, it will be a busy one for
Malaysia’s trading partners. All eyes will be on the world’s second largest economy and the temperature check on its manufacturing activity, as China is set to release its manufacturing Purchasing Managers’ Index (PMI) data for May on Sunday (May 31).
China’s April manufacturing PMI, measured by the Caixin/Markit PMI, fell to 49.4 from 50.1 in March, according to Reuters. A reading above 50 indicates expansion and one below 50 represents contraction.
Given its position as a major trading partner of the world, a gauge of China’s manufacturing health as it recovers from the after-effects of the Covid-19 pandemic will be a development that is closely watched. Xinhua reported last Friday that China has made a decision to drop a specific economic growth target for 2020 due to the uncertainties because of Covid-19 and the global economic and trade environment.
UOB Global Economics and Markets Research, in its weekly outlook report last Friday, said there will be some key data coming in from India this week as the world’s second-most populous country releases its gross domestic product (GDP) data for the first quarter of 2020.
India — which has reported more than 118,000 Covid-19 cases — has been on a nationwide lockdown since March 25, which has since been extended to May 31.
UOB expects India’s GDP in 1Q2020 to slow to 1% from 4.7% in 4Q2019, which is in line with Bloomberg consensus. India, which will also be observing a public holiday on Monday and Tuesday in conjunction with Eid al-Fitr, is set to release its 1Q2020 GDP data on Friday.
Reuters, citing trade sources, reported last week that India had resumed purchases of Malaysian palm oil after a four-month gap following a diplomatic row.
Taiwan — the birthplace of tech giants Hon Hai Precision Industry Co Ltd, or better known as Foxconn Technology Group, and Taiwan Semiconductor Manufacturing Co — will also be releasing its 1Q economic growth performance on Thursday.
The only major Asia-Pacific central bank with a monetary policy decision this week (May 28) is the Bank of Korea, according to UOB. In the latest Bloomberg poll on May 21, five out of six analysts surveyed expect a 25 basis point cut to 0.5%.
Across the Causeway, Singapore will be observing a one-day public holiday on Monday for Hari Raya and is set to release its 1Q2020 GDP data the following day. A Bloomberg poll estimates that the city state’s economy contracted 1.8% in 1Q2020. UOB has a more positive estimate of just a 0.8% contraction on the premise of the strong surge in March industrial production.
Other economic data from Singapore this week include the April industrial production data, which according to Bloomberg estimates, is expected to contract 7.7%, and inflation numbers, as measured by the Consumer Price Index. UOB expects Singapore’s April CPI to chart a negative growth of 0.6%.
UOB also notes that Singapore’s Deputy Prime Minister Heng Swee Keat is expected to announce a new round of Covid-19 support measures for businesses and individuals on Tuesday.
Over in the developed markets, the US and the UK will be closed on Monday for their respective holidays. The key US Federal Reserve event to watch will be the latest Beige Book report on Thursday, while several senior Fed officials will speak in public forums, including Federal Open Market Committee voters Neel Tushar Kashkari (Tuesday) and John C Williams (Thursday) and, most importantly, chair Jerome H Powell (Friday), ahead of the FOMC Blackout period starting on Saturday. On its corporate earnings calendar, the US will have 14 S&P 500 companies reporting, including retailers.
Elsewhere, the European Central Bank will release its April ECB account of meeting minutes on Friday. Japan will also release its April jobless rate, retail sales and industrial production data on the same day.
Meanwhile, Datuk Seri Najib Razak’s 1Malaysia Development Bhd (1MDB)-Tanore trial hearing has been adjourned to June 3, after Hari Raya. Last week, during questioning, former 1MDB CEO Datuk Shahrol Azral Ibrahim Halmi testified that there was a lack of due diligence done on PetroSaudi International Ltd as the board and management had full trust in Low Taek Jho, whenever the now-fugitive businessman issued instructions.
On the corporate front, Bursa Malaysia-listed companies scheduled to have their annual general meetings this week include RHB Bank Bhd and Kronologi Asia Bhd, which will be conducting their AGMs virtually on Friday. CJ Century Logistics Holdings Bhd will hold its virtual AGM and extraordinary general meeting on Thursday.
As for corporate results, Bloomberg data shows that companies scheduled to release their quarterly financial results this week include IOI Corp Bhd and IJM Corp Bhd. Plantation giant IOI is scheduled to release its third-quarter financial results on Wednesday (May 27), while IJM will release its fourth-quarter and full-year 2019 results on Friday (May 29).