Last week’s highlights

• Ministry of Finance Malaysia (MOF) had released its 64th LAKSANA report

• Malaysia Manufacturing PMI edged up to 40.1 in July

• Malaysian average salaries and wages shrunk by 9.0% compared to 2019

• The FBM KLCI fell by 0.32% or 4.80 points for the week to settle at 1,489.80 points

• US unemployment rate dropped to a 16-month low of 5.4% in July

• June’s industrial producer prices rose by 1.4% in both the euro area and the EU

• China Markit manufacturing PMI slipped from 51.3 in June to 50.3 in July

• Indonesia GDP rebounded in 2Q21 to record positive growth of 7.07% yoy

• Singapore's retail trade moderated by 25.8% yoy in June 2021 to SGD3.3bn

• RBA, BOE and BOT kept the interest rates unchanged, while BCN and CNB hikes.

MALAYSIA ECONOMY

• According to the Ministry of Finance Malaysia (MOF) 64th LAKSANA report, under BNM-Micro financing, a total of RM246m has been disbursed to 10,057 micros businesses. For BNM-SMEs soft loan funds, a total of RM12.27bn was approved to the 25,911 applicants. Meanwhile, under the tourism sector financing PENJANA, 334 applications were approved with total funding of RM66.5m. Furthermore, a total of RM4.37m has been disbursed to 535 recipients under the CENDANA initiative. In Sabah, one-off aid for public transport drivers had reached RM1.3m, paid to 2,588 recipients. As of 23 July, 150,764 persons have enrolled under the recruitment incentive program and training assistance under various government agencies. As of reporting date, a total of RM862.47m had been channeled based on 2,384,504 claims to the front-liners as allowance. The disbursed amount of wage subsidy 1.0 and 2.0 schemes stood at RM12.912bn and RM1.324bn.

• The headline IHS Markit Malaysia Manufacturing PMI edged up to 40.1 in July from 39.9 in June 2021. Remaining well below the 50.0 no-change level, the latest reading pointed to a steep decline in operating conditions, albeit one that was fractionally softer than that seen in June.

• Based on the Salaries & Wages Survey Report 2020, the average salaries and wages shrunk by 9.0% compared to 2019 due to the COVID-19 pandemic. Within the M40 group, 20.0% of households have moved to the B40 group. Meanwhile, 12.8% of the T20 has shifted to the M40 group. Following the weakened domestic economic activities and the external sector, Gross National Income per capita has also declined to RM42,503 from RM45,311 recorded in 2019. The median and mean monthly household gross income in 2020 at the national level is RM5,209 and RM7,089, respectively. Compared to 2019, the median and mean values recorded a decrease of negative 11.3% (2019: 3.9%) and negative 10.3% (2019: 4.2%), respectively. On the other hand, the number of poor households increased by 234.4 thousand to 639.8 thousand in 2020 compared to 2019. The incidence of absolute and hardcore poverty in 2020 stood at 8.4% and 1.0%, respectively.

• The international reserves of Bank Negara Malaysia (BNM) amounted to USD111.1bn as of 30 July 2021. The reserves position is sufficient to finance 8.1 months of retained imports and is 1.1 times total short-term external debt.

Source: BIMB Securities Research - 9 Aug 2021