• Bank Negara Malaysia’s Monetary Policy Committee (MPC) kept the Overnight Policy Rate (OPR) unchanged at 1.75%.

• The headline IHS Markit Malaysia Manufacturing PMI dipped from 48.9 in January to 47.7 in February.

• China sets the target growth of more than 6% in 2021.

• In January 2021, the euro area seasonally adjusted unemployment rate inched down to 8.1% (Dec: 8.3%).

• Reserve Bank of Australia (RBA) decided to maintain the current policy settings at 0.10%.

• US employment jumps in February

MALAYSIA ECONOMY

• Bank Negara Malaysia’s Monetary Policy Committee (MPC) kept the Overnight Policy Rate (OPR) unchanged at 1.75% as the pressure for another cut has somewhat been reduced with the number of daily COVID-19 cases in the country trending downward and most of the restrictions have also been eased. The Statutory Reserve Requirement (SRR) was also kept unchanged at 2.00%.

• Malaysian Investment Development Authority (MIDA) reported it had RM65.9bn worth of potential investments to be executed in 2021 to 2022 once approved. MIDA has also identified 240 high-profile foreign investment projects with a potential investment value of RM81.9bn in the manufacturing and services sectors. These include ongoing negotiations with companies from various sectors, such as automotive, chemical and advanced electronics for high-value manufacturing, services and global supply chain hub projects.

• The Malaysian manufacturing sector lost further momentum during February. The headline IHS Markit Malaysia Manufacturing PMI dipped from 48.9 in January to 47.7 in February. Both production and new order volumes weakened in February.

• Money supply growth picked up in Jan 2021 as both broad money (M3) and narrow money (M1) growth increased in Jan 2021 to +4.3% yoy (Dec’20: +4.0%) and +19.1% yoy (Dec’20: +15.7%) respectively. The rise in M3 growth was in large part driven by higher banking system’s total outstanding loans growth (Jan’21: +3.8% yoy; Dec’20: +3.4%). Banking system’s total outstanding loans growth pick up was underpinned by business loans growth (Jan’21: +1.5% yoy; Dec’20: +0.5%) which was mainly contributed by the SME segments as household loans growth moderated slightly to +4.9% yoy in January 2021 (Dec’20: +5.0%). Consumer credit data mostly softened in January as MCO 2.0 came into force with a mixed bag of household loans indicators i.e., slower growth in outstanding household loans (Jan’21: +4.9% yoy; Dec’20: +5.0%) and household loans approvals (Jan’21: +8.8% yoy; Dec’20: +14.1%) amid higher double-digit growth in household loans applications (Jan’21: +30.6% yoy; Dec’20: +24.6%). Meanwhile, the decline in domestic credit card transactions worsened (Jan’21: -14.0% yoy; Dec’20: -1.9%). Consequently, banking system’s total deposit growth accelerated to +4.6% yoy in Jan 2021 (Dec’20: +3.9%).

Source: BIMB Securities Research - 8 Mar 2021