Bank Negara Malaysia (BNM) has kept the overnight policy rate (OPR) unchanged at 1.75%, as widely expected by economists, noting that global economies continued to strengthen, including Malaysia.

For Malaysia, BNM said the latest indicators point to continued improvement in economic activity in the first quarter of the year, and into April. “While the recent reimposition of containment measures in select locations will affect economic activity in the short term, the impact will be less severe as almost all economic sectors are allowed to operate,” said BNM in a statement after its Monetary Policy Committee (MPC) meeting today.

Reuters previously reported that all 13 economists it polled saw the central bank keeping the OPR at its record low to help support the economy’s recovery as coronavirus cases rise even as it had benefited from strong external demand.

In its statement, the central bank said the growth trajectory is projected to improve, driven by a stronger recovery in global demand and increased public- and private-sector expenditure amid continued support from policy measures.

“Growth will also be supported by higher production from existing and new manufacturing facilities, particularly in the E&E (electrical and electronics) and primary-related sub-sectors, as well as oil and gas facilities,” it said, adding that the progress of the domestic Covid-19 vaccine programme will also lift sentiments and contribute towards the recovery in economic activity.

On the global front, BNM said the global economic recovery continued to strengthen, particularly in major economies, supported by improvements in manufacturing and trade activity.

The ongoing roll-out of vaccination programmes and sizeable fiscal stimulus measures in the US, as well as policy support in other major economies, will further facilitate an improvement in domestic demand, it noted.

The growth outlook, however, remains subject to downside risks, it said, stemming mainly from ongoing uncertainties in developments related to the pandemic and potential challenges that might affect the roll-out of vaccines both globally and domestically.

It also cautioned that the recovery trajectory of some economies could be disrupted by tightening of containment measures to curb Covid-19 resurgences.

“The balance of risks to the growth outlook remains tilted to the downside, due mainly to uncertainty over the path of the pandemic as well as potential risks of heightened financial market volatility,” it said.

Headline inflation to average higher at 2.5%-4%
On Malaysia’s 2021 headline inflation, it is projected to average higher at between 2.5% and 4%, primarily due to the cost-push factor of higher global oil prices.

“In terms of trajectory, headline inflation is anticipated to temporarily spike in the second quarter of 2021, due particularly to a lower base from low domestic retail fuel prices in the corresponding quarter of 2020.

“However, this will be transitory as headline inflation is projected to moderate thereafter as this base effect dissipates,” it said.

Nonetheless, the underlying inflation, as measured by core inflation, is expected to remain subdued, averaging between 0.5% and 1.5% for the year amid continued spare capacity in the economy.

According to BNM, the MPC considers the monetary policy stance to be appropriate and accommodative.

“Given the uncertainties surrounding the pandemic, the stance of monetary policy going forward will continue to be determined by new data and information, and their implications for the overall outlook for inflation and domestic growth,” it added.

BNM slashed the OPR four times last year, totalling a cumulative reduction of 125 basis points (bps), to boost the pandemic-struck economy.

Source: TheEdgeMarket.com

The state Health Department has submitted a risk analysis to the Health Ministry on the Covid-19 situation in Penang to enable the National Security Council (NSC) to decide on whether the next phase of the restricted movement should be implemented here.

Penang logged 305 positive Covid-19 cases today, bringing the total cumulative cases to 20,945.

There are 14 active clusters today, of which eight are from the manufacturing sector, education institution (two clusters), social activity (two clusters) and one cluster each involving a detention centre and a construction site.

Chief Minister Chow Kon Yeow said daily surveillance showed an increasing trend of the Covid-19 cases since the 17th epid week. The R-naught (Rt) had also increased to 1.13 yesterday.

“Also, all five districts are in the red zone, with the northeast district recording 722 active cases in the past 14 days.

“Penang is also beginning to report schools and social activity clusters,” he said today.

Chow said sporadic cases also showed a visible increase since April 30.

“As such, it is everybody’s responsibility to ensure they continue to strictly comply with the standard operating procedures (SOP) in place to break the infection chain.

“We should not let our guard down at any time,” he added.

Source: NST Online

Artist’s impression of STP2

Kerjaya Prospek (M) Sdn Bhd, a wholly-owned subsidiary of Kerjaya Prospek Group Bhd (Kerjaya), has bagged a RM28.4 million contract from Persada Mentari Sdn Bhd, an indirect subsidiary of Eastern & Oriental Bhd.

The group said the contract entails the execution and completion of site works and earthworks; foundation piling system and pile caps construction; basement construction and all associated works for the proposed construction of two 35-storey serviced apartment blocks and one level basement in Seri Tanjung Pinang, Penang.

“The contract shall commence on May 18, 2021, to be completed within 12 months from the commencement date,” it said in a filing with Bursa Malaysia today.

The group said the contract would bring its year-to-date contract replenishment for 2021 to RM384.5 million and was expected to provide an additional revenue stream for the group for the next one year.

Kerjaya executive chairman Datuk Tee Eng Ho said the contract was the third job win for the group this year, adding that the contracts were expected to contribute positively to the group’s earnings and net assets per share for the financial years 2021 and 2022.

Source: Bernama

About M Vista @ Southbay

A low density residential development by Mah Sing Group, part of the company’s Southbay township development at Batu Maung. It is located just a stone’s throw away from Free Trade Zone, less than 5 minutes drive to Penang Second Bridge.

This development features 237 residential units with built-up size ranges from 534 sq.ft. to 1,201 sq.ft.

Find out more about M Vista @ Southbay

HSBC Global Research expects Bank Negara Malaysia (BNM) to keep the Overnight Policy Rate at 1.75% at its third Monetary Policy Committee meeting on Thursday.

In a research note yesterday, its chief economist for ASEAN, Joseph Incalcaterra, said despite downside risks to BNM’s economic growth forecast, there was a high bar for further monetary policy accommodation.

“BNM can count on manufacturing growth to provide support to the economy and employment.

“The government has also secured enough vaccine doses to enable the country to achieve some form of herd immunity by end-2021, despite supply challenges and signs of vaccine hesitancy in the short term,” he added.

He pointed out that despite a slow start to vaccinations, Malaysia was one of only a few Asian economies that might reach herd immunity this year.

Incalcaterra said HSBC Global Research expected the upward momentum for export to be sustained after the country recorded a 31% year-on-year increase in March, which was driven by a 47.1% jump in electronics exports.

He added that activity in Malaysia’s manufacturing and export sectors continued to roar, in line with the expectation that export growth would accelerate due to soaring demand for Malaysia’s semiconductor exports.

He attributed this in part to a large share of automotive chip production, coupled with higher commodity export volumes.

Moreover, Incalcaterra said headline inflation was likely to continue rising in 2021 due to base effects and higher energy prices.

“While BNM can look through this volatility, it would reduce the likelihood of further easing as the real policy rate buffer evaporates.

“BNM also remains focused on elevated household debt growth and can rely on still-expansionary fiscal policy to provide targeted support to the economy,” he added.

He noted that Malaysia appeared to be in the midst of a worrying fourth wave of Covid-19 infections, with daily new cases now exceeding 3,000 and hospital occupancy rates around Kuala Lumpur being alarmingly high.

“Some degree of further restrictions appears likely, and mobility and consumer spending may soften further in the coming weeks.

“This could significantly derail the pace of the recovery in the second quarter,” said Incalcaterra.

Source: Bernama