Last week’s highlights

• Ministry of Finance Malaysia (MOF) had released its 61st LAKSANA report

• Malaysia’s industrial production index (IPI) surged by 26.0% yoy in May

• Malaysia’s distributive trade recorded sales of RM108.3bn in May

• The FBM KLCI rose by 0.12% or 1.90 points for the week to settle at 1,522.48 points

• U.S. headline inflation ticked higher by 5.4% yoy in June

• U.S. industrial production (IP) rose by 0.4% mom in June

• China’s 2Q21 GDP rose by 7.9% yoy

• Singapore’s advance estimates GDP grew by 14.3% yoy in the 2Q21

• BOC, RBNZ, BOJ, BOK, and CBRT kept the interest rates unchanged, while Central Bank of Chile hikes.

MALAYSIA ECONOMY

• According to the Ministry of Finance Malaysia (MOF) 61st LAKSANA report, under the Agrobank Microcredit Financing Scheme, a total of 13,720 agricultural Micro SMEs had received RM167.98m fund. Furthermore, a total of RM4.22m has been disbursed to 520 recipients under CENDANA initiative. For technical and digital adoption for SMEs and mid-tier companies (MTC), a total of RM76.6m has been distributed to 13,873 recipients. Meanwhile, 149,791 persons have participated in the skills enhancement program as of 2nd July under various government agencies. As of reporting date, a total of RM862.35m had been channeled based on 2,383,893 claims to the front liners as allowance. The disbursed amount of wage subsidy 1.0 and 2.0 schemes stood at RM12.907bn and RM1.308bn, respectively.

• Malaysia’s industrial production index (IPI) surged by 26.0% yoy in May, after a 50.1% gain in April 2021. The growth in May 2021 was driven by the increase in the index of manufacturing (29.8%), mining (20.7%), and electricity (7.9%). On a monthly basis, the IPI in May declined by 0.3 %. Based on the month-on-month comparison, the contraction in IPI for May was due to the decline in sub-indices of manufacturing (-2.0%) and electricity (-0.6%) outweighed the expansion of mining (+6.1%). The IPI for the period of January to May 2021 recorded a growth of 14.9% compared to the same period of the previous year.

• Malaysia’s distributive trade recorded sales of RM108.3bn in May, registering a double-digit growth of 28.3% yoy, after hitting the fastest pace in the previous month. This expansion was due to stronger motor vehicle trade growth, which rose by 71.1% yoy during the month. Similarly, wholesale and retail trades surged by double-digit growth of 31.2% yoy and 17.3% yoy, respectively. On a monthly basis, the sales value of wholesale & retail trade dropped 2.5% in May. Sales of wholesale trade sub-sector rose marginally by 0.8% mom. Sales of motor vehicles contracted 16.2% whilst retail trade sub-sector fell 2.2%.

• In 2020, the median monthly salaries & wages dropped by a double-digit of 15.6% to RM2,062 from RM2,442 a year earlier. Similarly, the mean monthly salaries & wages also declined by 9.0%, from RM3,224 to RM2,933. The decrease was due to the introduction of stringent containment measures amid the COVID-19 pandemic last year. With higher unemployment and underemployment, the wages growth fell despite the persistent rollout of government supports.

Source: BIMB Securities Research - 19 Jul 2021