This article first appeared in The Edge Malaysia Weekly on March 28, 2022 - April 3, 2022

This week, the focus will be on the five shortlisted bids for the coveted digital banking licences in Malaysia. Bank Negara Malaysia is slated to announce the results this week when it releases the BNM Annual Report 2021, Economic & Monetary Review 2021, and Financial Stability Review 2nd Half 2021 on Wednesday. (See also “RHB-Axiata, Grab, Sunway, YTL tipped for digital banking licence” on Page 10.)

Apart from the central bank, capital markets regulator the Securities Commission Malaysia (SC) will also be unveiling its Annual Report 2021 on Monday.

Another major milestone will be April 1, when Malaysian borders reopen, along with the removal of much of the pandemic restrictions on travellers, after a two-year closure from March 2020.

Last Thursday, Health Minister Khairy Jamaluddin said fully vaccinated travellers would be allowed to cross the land border between Malaysia and Singapore from April 1 without the need for quarantine or Covid-19 tests before departure and upon arrival. For air travellers, however, tests are still required two days before departure.

On the economic front, it is a quiet week for data releases for Malaysia. While the S&P Global Manufacturing Purchasing Managers’ Index (PMI) for March for Malaysia — along with other countries — will be out on April 1, there are no major official data releases this week.

The reading for February came in at 50.9 against 50.5 the month before. A reading above 50 indicates an expansion of the manufacturing segment.

Note that the IHS Markit Manufacturing PMI is now the S&P Global Manufacturing PMI following the completion of a merger between S&P Global and IHS Markit on Feb 28.

It is a busy week in other parts of the world, with an updated US non-farm payroll report and global manufacturing PMIs, with insights expected on business conditions amid the Ukraine war and lockdowns in China, says S&P Global.

Russia invaded Ukraine on Feb 24 this year.

“Global market sentiment has remained subdued as concerns have flared over rising geopolitical uncertainty, soaring energy prices, persistent supply constraints and a hawkish Fed. As such, the slew of economic indicators — including worldwide manufacturing PMI data — arrives at a timely period in offering some concrete gauge of the severity of supply and price pressures and their impact on production,” says S&P Global in a note last Friday.

It adds that March’s US non-farm payroll report will also be in focus, and is expected to show both a tightening labour market and rising wage pressures. “Any upward surprises could be an immediate trigger of more hawkish rate hike expectations.”

Other major economic data releases to watch out for from developed markets include preliminary March inflation numbers in Germany and the eurozone on Thursday and Friday respectively.

In Asia, the Bank of Thailand’s latest policy meeting and Japan’s Tankan survey will be due on Wednesday and Friday respectively.

Across the Causeway, the reopening of land border crossing between Singapore and Malaysia for vaccinated travellers will come just three days after further relaxation of pandemic safety measures from Tuesday onwards in the city state.

In terms of economic releases, monthly bank loans and money supply data for February is due on Thursday, but market focus may be on the preliminary 1Q2022 Urban Redevelopment Authority private home price index on April 1, says UOB Global Economics and Markets Research in a report last Friday.

During the week, the 27th Organization of the Petroleum Exporting Countries (Opec) and non-Opec Ministerial Meeting will convene on Thursday via video conference. According to UOB, Opec will likely maintain a gradual pace of increase in production, as it did in early March, despite the Russia- Ukraine conflict and spike in energy price.

The European Union (EU) and China will hold a virtual summit on Friday, attended by Chinese President Xi Jinping and Premier Li Keqiang, along with European Council president Charles Michel and European Commission president Ursula von der Leyen. According to Bloomberg, EU leaders are likely to reinforce the US warning that China would face serious consequences if it tries to cushion the blow of sanctions against Russia.

In the Malaysian courts, the audit report tampering trial of former prime minister Datuk Seri Najib Razak and former 1Malaysia Development Bhd CEO Arul Kanda Kandasamy is expected to resume this week.

Senior lawyer Tan Sri Muhammad Shafee Abdullah’s RM9.5 million anti-money laundering case is also expected to resume this week.

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