Last week’s highlights

• Ministry of Finance Malaysia (MOF) had released its 59th LAKSANA report last week.

• The Producer Price Index (PPI) local production surged by 11.9% in May

• Malaysian government unveiled a new stimulus package worth RM150bn

• The FBM KLCI fell by 1.69% or 26.33 points for the week to settle at 1,533.35 points

• US’s total nonfarm payroll employment rose by 850,000 in June

• Euro area unemployment rate lowered to 7.9% in May 2021

• UK nationwide house price index (HPI) accelerated to 13.4% in June 2021

• Australia's export for goods and services increased 6.1% mom

• Japan’s unemployment rate stood at 3.0% in May

• Central banks of Sweden and Colombia kept the interest rates unchanged.

MALAYSIA ECONOMY

• According to the Ministry of Finance Malaysia (MOF) 59th LAKSANA report, under the tourism sector financing PENJANA, 332 applications were approved with total funding of RM66.1m. For technical and digital adoption for SMEs and mid-tier companies (MTC), a total of RM71.3m has been distributed to 13,872 recipients. Furthermore, a total of RM4.09m has been disbursed to 519 recipients under the CENDANA initiative. As of reporting date, a total of RM791.27m had been channeled based on 2,212,088 claims to the front liners as allowance. A total of 137,659 persons have been employed under the recruitment incentive program and training assistance. The disbursed amount of wage subsidy 1.0 and 2.0 schemes remained at RM12.90bn and RM1.283bn, respectively.

• The Producer Price Index (PPI) local production surged by 11.9% in May 2021, accelerating from 10.6% growth in the previous month. The performance was the third month of increase and hit the highest in May. The growth was driven by the increase in all sub-indexes: the mining index (68.5%); agriculture, forestry & fishing index (60.0%); manufacturing index (5.0%); water supply (1.2%); electricity & gas supply (0.1%). Meanwhile, PPI by stage processing, the index of crude materials for further processing surged slower from 55.8% to 53.6% in May 2021. The index of Intermediate materials, supplies & components also increased by 6.9%. The finished goods recorded an inflation of 0.2% in May compared to a 0.7 % decline in April.

• On 28 June 2021, the Malaysian government unveiled a new stimulus package worth RM150bn with RM10bn as a direct fiscal injection. The package was named the "National People's Well-Being and Economic Recovery Package (PEMULIH). This stimulus was introduced to support the economy under the National Recovery plan. According to the government, the plan expects to prolong until the end of the year. The stimulus unveiled three main objectives: continuing the rakyat welfare agenda, supporting business continuity and improving vaccination capacity. The package was included in the form of EPF withdrawal (i-Citra), cash aid, subsidies, moratorium, wage subsidies, unemployment assistance, grants and financing, electricity discounts, and healthcare spending

Source: BIMB Securities Research - 5 Jul 2021