EVENING 5: Malaysia’s GDP expands 2.9% in 2Q, driven by private-sector

The Edge TV

In today’s edition of Evening 5 — Malaysia’s economy grew 2.9% y-o-y in the second quarter as private-sector expenditure continued to drive growth. Meanwhile, CelcomDigi saw its 2Q net profit jump 56% as its revenue doubled.

Transcript

00:00 Malaysia's economy is measured by GDP, grew by 2.9% year-on-year in the second quarter,

00:10 driven mainly by private sector expenditure amid improving labour market conditions, continued

00:15 increase in domestic demand and higher tourism activities. Growth moderated from 5.6% year-on-year

00:21 growth in the first quarter due to weaker external demand amid global technology down

00:26 in the cycle, lower commodity production, as well as the high base effect from the second

00:30 quarter of 2022. GDP growth for the entire year is likely to come in at the lower end

00:35 of Bank Negara's forecast range of 4-5%, according to Governor Datuk Syeh Abdul Rashid

00:41 Ghaffour. He explains that growth will continue due to a number of factors, including Malaysia's

00:47 strong labour condition and progress in multi-year projects by both the private and public sectors.

00:52 Abdul Rashid reiterates that private consumption remains as the anchor of growth for the economy.

00:57 BNM expects employment to grow by 2.4% and policy measures are also in place to support

01:03 those affected. On inflation, Abdul Rashid said headline inflation is expected to average

01:07 close to the lower bound of the central bank's forecasted range of 2.8% to 3.8% in 2023.

01:14 He said that in line with the easing cost environment, headline inflation continues

01:19 to trend lower in the second quarter, averaging 2.8% for the quarter as compared to 3.6% for

01:25 the first quarter. According to Abdul Rashid, while core inflation also moderated to 3.4%

01:30 during the quarter, compared with 3.9% in the first quarter of 2023, it still remains

01:36 elevated relative to the historical average of around 2%, and as such, he says, the central

01:41 bank needs to remain vigilant. On the ringgit, Abdul Rashid said with investors' expectations

01:46 of further aggressive monetary policy tightening in the US and other advanced economies throughout

01:51 the first half of the year, the ringgit depreciated by 4.7% against the US dollar year to date.

01:58 Nonetheless, Abdul Rashid notes that the local currency has appreciated 1.1% against the

02:02 greenback since July 1st, amid overall market expectations that the monetary policy tightening

02:07 campaign in the US is nearing its end. Meanwhile, Abdul Rashid also said that Malaysia's well-diversified

02:13 economy enables it to withstand risks from China's slower economic growth as the country

02:18 does not heavily depend on one particular trade partner or industry. He points out that

02:23 although China is Malaysia's second largest trade partner, it only accounts for 13.6%

02:28 of Malaysia's total trade.

02:30 Selkom DG's net profit for the second quarter jumped 56% year-on-year to $343.5 million

02:41 from $220 million a year ago, as revenue doubled to $3.12 billion from $1.54 billion ringgit.

02:49 The telco declared a second interim dividend of $0.032 per share. In a boss filing, Selkom

02:54 DG attributed the revenue growth for the second quarter to higher device sales, while subscriber

02:59 base grew by 3% with net additions of $599,000. Blended average revenue per user slipped to

03:06 $41.0 from $42.0 a year ago. During the quarter under review, Selkom DG said it ramped up

03:12 integration activities and invested $252 million in CAPEX, catering for network capacity upgrades

03:19 and integration initiatives. The telco adds that as key projects have commenced in June

03:23 2023 onwards, it expects CAPEX to intensify for the second half. For the first half, Selkom

03:29 DG recorded a net profit of $661.4 million, which was 45% higher year-on-year, while revenue

03:37 for the six months more than doubled to $6.3 billion from $3.06 billion ringgit. This marks

03:43 Selkom DG's second full quarter of combined financial reporting, post-merger of Selkom

03:47 Aksyata and DG.com. Looking ahead, Selkom DG said it remains focused on delivering top-line

03:53 growth and profitability while pushing ahead with integration of its networks, IT and organisation.

03:59 CEO Dato' Idam Nawawi says the country's largest telco remains committed to leading 5G adoption

04:05 in the country and have put in place initiatives such as the Selkom DG My5G CEO Roundtable series

04:12 to help businesses realise the true potential of 5G together.

04:21 Construction firm Kejaya Prospects' non-independent, non-executive chairman Dato'

04:25 Tee Eng Ho said the political stability arising from the outcome of the just-concluded six-state

04:31 elections is set to be a major tailwind for the local economy moving forward, boosting

04:36 the group's prospects. According to Tee, the worst is over. His optimism is also fuelled by his view

04:42 on the overnight policy rate, where he feels that it will not go up anymore. Tee explains that these

04:47 factors would encourage foreign direct investment in the country, which will boost construction

04:52 activity and therefore bring in more jobs for the group. In the second quarter, its net profit rose

04:57 10.6% year-on-year to RM31.57 million, as it posted a record revenue of RM309.3 million for the quarter.

05:05 For the first half of FY2023, net profit improved 6.2% year-on-year to RM61 million, on the back of

05:12 a 5% increase in revenue to RM606.5 million. It had declared a second interim dividend of

05:18 RM0.02 per share. Tee says the group is on track to achieve its new order book win target of RM1.2

05:24 billion after it clinched a total of RM983.8 million worth of contracts so far this year.

05:30 It has an outstanding order book of RM4.5 billion as at end June.

05:40 Pestec International called the termination of the Aerotrain Project made by Malaysia

05:44 Airport's holdings as "misconceived and invalid". In a boss filing, Pestec said it firmly disputes

05:50 the termination as contemplated in the termination notice and will enforce its legal rights as

05:56 necessary but prefers to seek an amicable solution with the airport operators unit,

06:01 Malaysia Airport Sepang. Additionally, it has issued a formal letter to this effect.

06:06 In a separate filing, Pestec said that the termination of the RM742.95 million contract

06:12 is expected to pose "unfavorable effects" to both its earnings and revenue for FY2024.

06:18 The group has been loss-making since the fourth quarter of FY2022. To recap,

06:23 MAHB's unit had awarded the contract to a subsidiary of Pestec in December 2021,

06:28 only for it to be terminated this week, with MAHB citing various reasons, one of which was

06:34 non-performance. This had been Pestec's biggest contract win to date.

06:38 Citigroup's Singapore subsidiary and CIMB Group Holdings are among banks affected by a major

06:48 money laundering case in the city-state, involving about S$1 billion of assets. According to Bloomberg,

06:55 the two lenders were used in 2020 and 2021 by some of the foreign nationals who were arrested

07:01 in raids this week across the country, according to charged documents. Two Chinese nationals,

07:06 Zhang Ruijin and Lin Baoying, were charged for seeking to cheat CIMB Bank about their ownership

07:12 and sale of a property in Macau. Turkish national Van Suu Mee was charged for allegedly submitting

07:17 a fake document to Citibank Singapore, while Cambodian national Su Baolin was charged for

07:22 falsely claiming he was an executive director of a firm in a supporting document to the US Bank.

07:28 CIMB in a statement said that it does not "commend on any individuals, ongoing investigations or

07:34 court proceedings" and is "fully committed to strong corporate governance and strict compliance

07:38 with banking standards, laws and regulations". The Monetary Authority of Singapore said on

07:43 Wednesday that suspicious fund flows, dubious documentation of the source of wealth,

07:47 as well as other inconsistencies prompted unnamed banks to file suspicious transaction reports

07:52 to authorities. The regulator added that it will take firm action against financial institutions

07:57 if there are breaches of anti-money laundering rules.

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