Friday 29 Mar 2024
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This article first appeared in The Edge Malaysia Weekly on April 27, 2020 - May 3, 2020

This week will be a short one for most financial markets except in the US, India, Australia and New Zealand, as they will close on Friday in conjunction with Labour Day. However, with lingering concerns over salary cuts and job losses as businesses across the world have been heavily impacted by the lockdowns due to the Covid-19 pandemic, there is not much to celebrate on May 1.

Hong Kong and Vietnam will get an additional holiday on Thursday (April 30) as they celebrate Buddha’s birthday and Liberation Day respectively.

As the holy month of Ramadan has begun, it will be a relatively quiet week on Malaysia’s economic calendar with only Bank Negara Malaysia scheduled to release the detailed breakdown of its international reserves at end-March 2020 on Thursday.

Across the Causeway, the spotlight will continue to be on the sharp spike in the number of Covid-19 infections among foreign workers in Singapore, which accounted for nearly 70% of all reported cases. Last Friday, Singapore reported an additional 897 new cases, raising the tally for the city-state to 12,075. There have been 12 reported deaths.

On the economic data front, Singapore will release its March bank lending and monetary aggregates data on Thursday.

The purchasing managers’ index (PMI) for China’s manufacturing sector in April will also be released on Thursday. The manufacturing PMI is expected to edge lower to 51.0 from 52.0 in March, while the non-manufacturing PMI is expected to be lower at 50.5 from 52.3 in March, says UOB Global Economics and Markets Research.

Also in the spotlight will be a raft of trade data from several countries. Hong Kong will release its March data on Monday, New Zealand on Wednesday and Thailand on Thursday. Meanwhile, Viet­nam will release its April trade data on Wednesday.

South Korea will release its April trade data on Friday despite it being a holiday. According to a Bloomberg poll, South Korea’s exports may contract 19% y-o-y, from -0.2% y-o-y in March, while imports may decline by 12.8% y-o-y from -0.3% in March.

No monetary policy decision is due from the regional central banks this week.

However, this will be a busy week for developed markets as the US Federal Open Market Committee (FOMC), the European Central Bank (ECB) and the Bank of Japan (BoJ) are scheduled to make their monetary policy decisions. BoJ will hold its meeting first on Monday, followed by the FOMC on Tuesday and Wednesday, and the ECB on Thursday.

Han Tan, market analyst at FXTM says: “Additional support measures may have a limited impact on risk sentiment, as investors remain focused on signs that the global outbreak has peaked while trying to ascertain whether major economies can reopen. US federal social distancing guidelines are set to expire on May 1. As more of the global economy reopens, and more importantly, remains open, that may trigger a rise in global risk appetite.”

In the US, notable data releases include the advance March goods trade balance and March wholesale inventories on Tuesday, the advance estimate of 1Q2020 GDP on Wednesday, initial jobless claims on Thursday and March construction spending on Friday. Meanwhile, corporate earnings updates from Alphabet, Microsoft, Apple, Amazon.com, Facebook, Spotify, Tesla, Mastercard, Visa, Merck, Pfizer, Pepsi, Starbucks, McDonald’s, UPS, AMD, Caterpillar, Shell, Exxon Mobil and Chevron are expected to garner investor attention.

In Europe, the main highlight will be the preliminary estimate of 1Q2020 GDP data for the eurozone, France, Spain and Italy, as well as the preliminary April Consumer Price Index for the eurozone on Thursday.

On the local corporate front, United Plantations Bhd’s annual general meeting (AGM) and extraordinary general meeting (EGM) have been postponed to May 12. The EGM is to obtain shareholders’ approval to issue 208.13 million bonus shares on a one-for-one basis.

Kumpulan H & L High-Tech Bhd and Amtel Holdings Bhd have also decided to postpone their AGMs on April 28 and May 12 respectively. Likewise, Paragon Union Bhd says it is monitoring the situation closely to determine the appropriate time to schedule its AGM.

Nestlé (Malaysia) Bhd will proceed with its AGM on April 30 as scheduled. However, in view of the current Covid-19 pandemic, it has decided that the meeting be fully virtual and conducted entirely via remote participation and voting.

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