TIME Dotcom Bhd, International reserves and gloves

KUALA LUMPUR: TIME Dotcom Bhd recorded a 24.56% drop in net profit to RM69.79mil for the second quarter ended June 30, 2020, as compared to RM92.5mil in the previous corresponding quarter.

But pre-tax profit was 1.6% higher year-on-year to RM97.9mil against RM96.4mil previously.

The company cited higher revenue growth, lower depreciation charges and lower interest expense.

BNM’s international reserves up marginally to US$104.3b

Bank Negara Malaysia’s international reserves stood at US$104.3 billion (RM436 billion) as at Aug 14, 2020, up marginally from US$104.2 billion as at July 30, 2020.

“The reserves position is sufficient to finance 8.5 months of retained imports and is 1.1 times total short-term external debt,“ the central bank says in a media release.

Top Glove, Supermax erase losses in morning trades

Top Glove Corp Bhd and Supermax Corp Bhd’s share prices rose among Bursa Malaysia top gainers in morning trades on Friday.

Investors bargain hunting continued with their target on rubber glove manufacturers.

Companies like Top Glove are beneficiaries of strong global demand for gloves due to the Covid-19 pandemic.

At 10.43 am Friday Top Glove rose 44 sen or 1.62% to RM27.58 after falling to its lowest so far today at RM26.70.

Supermax climbed 32 sen or 1.53% to RM21.26 after falling to its lowest so far today at RM20.60.


Economy contracted by 17.1% in Q2 of 2020

Bank Negara Malaysia says the economy contracted by 17.1% in the second quarter of 2020 (1Q 2020: 0.7%).

The decline reflected the unprecedented impact of the stringent containment measures to control the COVID-19 pandemic globally and domestically.

In Malaysia, the nationwide Movement Control Order (MCO) included various measures that restricted production and consumption activities.

This resulted in demand and supply shocks that emanated not only from significantly weak external demand conditions, but also production constraints in many economic sectors.

Additionally, there was a marked decline in tourism activity due to international border closures and restricted interstate travel.

On the supply side, most economic sectors registered negative growth, while most expenditure components declined. On a quarter-on-quarter seasonally-adjusted basis, the economy contracted by 16.5%.

During the quarter, headline inflation was at -2.6%, mainly due to substantially lower retail fuel prices compared to last year and the tiered electricity tariff rebate. Core inflation moderated slightly to 1.2%.

Exchange rate developments

In the second quarter of 2020, the ringgit appreciated by 0.5% against the US dollar, following the resumption of non-resident portfolio inflows as investor sentiments and risk appetite improved.

This was due to the quick implementation of large-scale liquidity injections and policy responses by central banks and governments.

Additionally, investor sentiments were also supported by the gradual easing of movement restrictions in a number of countries. This development is in line with regional currencies, which also appreciated against the US dollar during the quarter.

In the more recent period beyond the second quarter, the low global interest rate environment and optimism on a recovery in global growth continue to drive the positive market momentum within the region. As a result,

Malaysia continued to experience non-resident portfolio inflows and the ringgit appreciated by 2.2% against the US dollar since end-June 2020 (as at 13 August).

However, the global environment remains highly uncertain in the near-term, which may lead to capital flows and exchange rate volatility going forward.

Financing conditions

Net financing to the private sector1 continued to expand at 3.7% on an annual basis. Growth in outstanding business loans increased from 3.4% in 1Q 2020 to 3.9% in 2Q 2020, while outstanding household loan growth was sustained.

On a monthly basis, disbursements for business loans recovered to normal levels in June from low levels during the MCO in April and May.

This was in line with business loan demand that increased during the quarter, especially for working capital needs, while household demand for loans continued to decline amid more cautious sentiments.

GRADUAL RECOVERY

The Malaysian economy is expected to recover gradually in the second half of 2020 as the economy progressively re-opens and external demand improves.

Economic activity has resumed since the economy began to reopen in early May 2020. Consequently, growth is expected to have troughed in the second quarter of 2020, with a gradual recovery in the second half.

This outlook is underpinned by the rebound of key indicators such as wholesale and retail trade, industrial production, gross exports, and electricity generation.

READ THE FULL RELEASE HERE


Analyst: Why Mahathir is fast catching up

An analyst known for his articles on Malaysia and geopolitical affairs said Mahathir Mohamad has made an impact among the Malay voters and this has reduced PM Najib Razak chances of winning big, or winning at all.

The controversial blogger also saud there is not much time left for the PM to call for the elections this year.

In the article published on TISG, the analyst Cordoba Ali said if Najib were to call for elections in the first quarter of the year, he might seal a narrow victory for his party and remain in power.

But later than that would mean his margin snatching a victory from the grip of former PM Mahathir Mohamad could be even more difficult.

Cordoba wrote: Najib Razak has a tiny window of opportunity to call for polls that could seal a victory for his ruling coalition but waiting in the wings with the undercurrents of the Malay voters slowly swinging towards him is Mahathir Mohamad.

“The margin is so thin that he might be in difficulty if he were to call for the general elections after the first quarter of the year,” he said.

Cordoba was recently the object of criticism from a local newspaper and blogger Raja Petra Kamaruddin who lambasted the analyst for saying the recent RCI on Bank Negara’s loss of foreign exchange funds in the 1990’s was an attempt at ‘nailing Mahathir’.

Cordoba believes the longer Najib waits, the more time he is giving to his opponents, in particular to Mahathir to campaign to the Malays to rope them against him.

The impact of Mahathir, who was chosen as prime minister candidate by the opposition coalition, is being felt across Selangor and in other parts of peninsular Malaysia, said the article.

The article also quoted The Malaysian Insight which interviewed two analysts who seemed to admit that Mahathir is making an impact among the Malay voters outside the urban areas in the peninsula Malaysia.

The analysts did not believe a Malay ‘tsunami’ is happening, but one of them said it is in the making.

What Mahathir needs, Cordoba argued, is more time and that is what Najib is giving him by delaying the polls.

Cordoba also listed the core strategy of Mahathir in his campaign to rid the country of Najib.

He said Mahathir understood through his campaigns in Selangor that the urban areas were already in the bags for the opposition Pakatan Harapan, but that Umno needed more Malay support to remain in power.

Thus, the old fox is campaigning among the Malays in the outskirts of urban areas where he his hitting hard on with his messages on the corrupt practices of which he accuses Najib’s government.

“Mahathir has only one strategy: garner Malay support and this can only be bad for the Barisan Nasional which is counting mostly on Malay support to remain in power.

“But Mahathir seems to be doing it right, with his campaigns in the villages and in less urbanised areas drawing a fair number of folks who want to hear the other side of the political dialogues. These folks are constantly bombarded with Najib’s interactions on national television and in the tightly controlled local mainstream medias.

“They have no choice but to come out whenever they hear – at times by word of mouth – that Mahathir the former PM who has turned against his once protege Najib is around the corner,” Cordoba wrote.

For Najib, the time frame in which he could call for the polls is fast closing on him. There is an atmosphere of elections in the air whenever he intervenes or wherever he visits.

It is only a question of time for the PM to call for the elections, though the pundits are divided on whether it will be in February, right after the Chinese New Year or much later in July before the cut-off date for elections to be held almost automatically in August.

The last elections were held in May 2013. The Barisan lost more seats than ever before in its history and lost the majority of the popular votes but it retained power because the first past the post is not such a valid equation in the country.

The ruling party won most of its seats in marginal areas in Selangor but it won big in rural areas where it however met with rising contestation against its rule.

 

The story first appeared in TISG


Public urged to be cautious with ICO, advised to refer to licensed agencies

The Securities Commission Malaysia (SC) and Bank Negara Malaysia (BNM) have advised the public to be wary of any initial coin offering (ICO) schemes, reminding them to exercise caution before participating in such schemes.

“The public are reminded to exercise caution before participating in any ICO schemes by checking their names against the list of institutions that are licensed under the laws administered by regulators,” the two institutions said in a media statement today.

The central bank said issuers should also be mindful that the launch of an ICO, the offering of digital tokens in exchange for digital currency or any form of payment and incidental activities thereof, might trigger regulatory requirements under securities laws.

Carrying on such activities without proper authorisation is an offence it said.

“No person is permitted to carry out any regulated activities such as fundraising, fund management and dealing in capital market products without obtaining necessary approval or authorisation from the SC.”

The SC and BNM said they wish to draw the public’s attention to ICO schemes which may involve activities that are subject to laws administered by the SC and BNM.

Further, ICO operators are prohibited from undertaking regulated activities such as deposit taking and banking business, foreign exchange administration activities and remittances, without the necessary authorisation under financial services laws administered by BNM.

Members of the public are advised to refer to the list of institutions that are licensed or approved to carry out regulated activities under the laws administered by the SC and BNM.

“Both authorities will continue to monitor these developments, and will not hesitate to take action against any person conducting illegal or unauthorised activities,” the statement said.