Investment & Market Trends

KUALA LUMPUR: Global credit rating agency, AM Best has maintained a stable outlook on Vietnam’s non-life insurance segment, citing accelerating non-life premium growth and increased demand for commercial lines insurance. In its latest Best’s Market Segment Report, ‘Market Segment Outlook: Vietnam Non-Life Insurance’, the rating agency notes the country’s Insurance Business Law as a recent regulatory reference supporting the stable outlook, as the newly adopted requirements on risk management, internal controls, internal audits and actuarial standards are expected to enhance risk governance and strengthen financial conduct. Property insurance was a key business growth driver in 2023, in which government spending on renewable energy, transportation, and other large-scale infrastructure projects are likely to drive greater demand for insurance coverage going forward. Vietnam’s non-life insurance market growth also should continue to benefit from the country’s reputation as an attractive destination for foreign direct investment (FDI). AM Best Senior Financial Analyst, Ken Lau said FDI inflows are expected to continue as one of the growth engines of the country’s economy, which in turn will bolster demand for commercial lines insurance. “Vietnam remains a magnet for FDI, as investors continue to seek global supply chain diversification,” he said in a statement. At the same time, market competition has eroded the underwriting profit margins of the motor and health insurance segments, owing partly to looser underwriting. Near-term pricing competition in these lines could constrain technical margins. The non-life insurance industry’s earnings also may be dampened by lower investment yields over the near term. The State Bank of Vietnam lowered the policy interest rate multiple times in the first half of last year and is expected to maintain an accommodative monetary policy stance over 2024. — BERNAMA

By Zarul Effendi Razali and Durratul Ain Ahmad Fuad KUALA LUMPUR: The MADANI Economy framework is viewed as an integral part of the government’s continuing rollout of policies and programmes that help to sustain the growth and resilience of the Malaysian economy. Malaysian Economic Association President Dr Yeah Kim Leng said the framework is seen as the fundamental policy framework that provided the setting to guide the formulation of various plans, roadmaps and blueprints that were subsequently rolled out. “Efforts under the framework to raise production, boost productivity and move up the value chain in the supply-side or production sector, along with a steady rise in employment, wage and incoming in the household or consumption sector, will translate into poverty eradication, improved livelihood and well-being, and higher overall gross domestic product (GDP). “Thus far, the country’s median income growth has kept pace with inflation although the B40 and the lower half of the M40 income groups may grapple with the rising cost of living, depending on their geographical location, lifestyle, family size and age group,” he told a local news agency. Year of Implementation The National Council of Professors fellow Prof Dr Azmi Hassan concurs with Finance Minister III Datuk Seri Amir Hamzah Azizan’s statement that 2024 is the starting point for the execution of the MADANI Economy framework. “I think the (framework) is still in the works in the first 6 months of the year so there is not enough to gauge the progress. “But looking at the economic growth via GDP, which grew at a higher rate of 4.2% in the first quarter of 2024 compared with 2.9% in the fourth quarter of 2023, there was a lot of improvement,” he said. In February this year, Amir Hamzah said 2024 will be about executing the MADANI Economy framework and all the policies that the government put out last year, as the government has established clear guidelines for the economy to move forward. “We are confident that we will be able to move along the path to execute the MADANI Economy framework this year and all the policies that we put out last year,” Amir Hamzah said. Additionally, Azmi opined that government will or political will is very important for the implementation of the MADANI Economy framework, adding that the implementation of the Fiscal Responsibility Act (FRA), which was passed in Parliament in October last year, would portray an efficient and responsibility government under Anwar’s leadership. “The government knew that targeted subsidies for diesel would be a sensitive issue but the subsidy (rationalisation) was implemented for a better future. “According to the FRA, the government wants to reduce the fiscal deficit to four per cent this year and 3% in the next 2 years. “The government is also committed to reducing the national debt to 60% of GDP. I think that’s a strong message from the government that it wants to implement the MADANI Economy framework,” he said. Enhancing fiscal position, people wellbeing On the targeted diesel subsidy implementation, Yeah said the move, besides strengthening the government’s financial and fiscal positions, also resulted in a more efficient allocation of scarce resources due to reduced leakages and more productive spending on development rather than subsidising consumption. In addition, he said the economy will also be more resilient in withstanding future oil price shocks. Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said the government is cognisant of the plight faced by society as prices continue to remain elevated. This, he said, has led to greater allocation on cash transfer programmes such as the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) in order to alleviate the financial burden experienced by low-income households. “The Employees Provident Fund Account 3 withdrawal is also being implemented, as the government recognises the need to accord the rakyat some flexibility to use their retirement savings. “On that note, the short-term needs have been looked at. Now it’s about how to use the savings from the subsidy rationalisation to improve our education, healthcare and infrastructure. Again, it will take some time for us to see the results,” he said. According to Mohd Afzanizam, cash transfer programmes such as STR and SARA, along with targeted subsidies have been the main tools for the government to minimise the impact on the rakyat arising from the policy changes on subsidies and taxes. “Such policy changes are not easy to implement, but it is the right thing to do in order to reduce leakages and ensure only those who are deserving will get the financial aid. “The lifting of diesel subsidies was more like the government demonstrating its commitment to fiscal discipline, which should create more space for spending in areas that will bring better productivity gains in the mid to long term. This may include spending on education, healthcare and infrastructure,” he said. Medium-term targets and NIMP 2030 Anwar, who is also Finance Minister, said the MADANI Economy: Empowering the People initiative is a comprehensive plan for Malaysia to address various challenges and issues related to its competitiveness and investment attractions, as well as outlining actions to address current issues that affect people’s lives. The initiative sets 7 key performance indicators as medium-term targets to be achieved within 10 years. They include Malaysia being in the top 30 of the world’s largest economies, the top 12 in the Global Competitiveness Index, the top 25 in the Human Development Index and the top 25 in the Corruption Perception Index. Other targets are increasing labour share of income to 45%, raising women’s labour participation rate to 60%; and achieving fiscal sustainability with a fiscal deficit of 3% or lower. Meanwhile, the New Industrial Master Plan (NIMP) 2030 is a key component of the MADANI Economy as it will support the realisation of economic reforms. According to Anwar, NIMP 2030 will revitalise the manufacturing sector to ensure Malaysia remains resilient amid growing challenges and megatrends. With a short window of 7 years, 4 missions have been formulated

KUALA LUMPUR: Maybank Investment Bank Bhd (Maybank IB) believes that Malaysia is currently undergoing its third investment upcycle. It said the combined private and public investments share of the GDP picked up from the recent post-pandemic low of 19.7% in 2022 to 21.3% in the first quarter of 2024 (1Q 2024). In a note, Maybank IB said the previous two investment upcycles saw gross fixed capital formation’s share of the GDP surging from 22.1% in 1987 to 49.2% in 1997, and from 21.7% in 2009 to 26.6 in 2013. “Investment is on the upswing as robust approved private sector investment since 2021 is being realised as per the trend in actual private investment. “Rising momentum in investment realisation can also be seen from the surge in imports of capital goods – especially machinery and transport equipment, as well as the acceleration banking system’s loans growth for industrial buildings, factories, land, construction and working capital,” it said. The investment bank reckoned that the investment upcycle reflects the benefit or payoff from political stability post-15th general election, foreseeing 5 drivers or themes: green economy, technology, Johor-Singapore Special Economic Zones (JS-SEZ), infrastructure and government-linked in the current wave. It noted that green investment is driven by the National Energy Transition Roadmap (NETR), where the energy transition financing needs imply a projected total investment of RM1.2 trillion – RM1.3 trillion over 2023-2050. Meanwhile, the technology industry investment is central to the New Industrial Master Plan (NIMP) 2030, with the National Semiconductor Strategy (NSS) aiming to attract RM500 billion worth of investments in the high-end semiconductor sector. Another significant investment area in technology is data centres, with an estimated RM130 billion investment expected between 2024 and 2035. At the same time, the Iskandar Regional Development Authority (IRDA) expects to attract investments worth RM226.5 billion into Iskandar Malaysia via JS-SEZ between 2024 and 2030 Maybank IB also foresees enhanced domestic investments by government-linked companies and government-linked investment companies (GLCs/GLICS), with committed investments in domestic capital markets totalling RM440 billion and RM120 billion in domestic direct investment (DDI) over the next 5 years. Historically, investment upcycles have led to sustained multi-year GDP growth, double-digit growth in construction, and above-trend consumer spending, it said. Inflation and the ringgit also saw upward trends during these periods. “However, note that inflation is also driven by a multitude of dynamics such as internal and external cost-push factors (such as subsidy removal/rationalisation; minimum wage hikes, global commodity prices), currency movements, as well as the more recent ‘shocks’ such as geopolitics and pandemic causing supply chain disruptions and inefficiencies,” it said. As for the ringgit, Maybank IB said the currency tends to appreciate versus the US dollar during the investment upcycle periods. In the first investment upcycle period, the currency appreciated from a low of 2.7960 on 13 June 1991 to a high of 2.4365 on 21 June 1995; a gain of 14.8%. In the second investment upcycle period, the local unit rose by 26.8 per cent from a low of 3.728 on 2 March 2009 to a high of 2.939 on July 27, 201. “Currently, the ringgit is on an uptrend as it closed at 4.4970 against the greenback on 2 August 2024; up 6.7% from this year’s low of 4.7987 on 20 February 2024. “The local note is supported by improving market sentiments amid strengthening domestic economic performance and macro fundamentals, as well as the prospect of the start of the United States Federal Reserve’s interest rate cuts cycle in September,” it said. — BERNAMA

KUALA LUMPUR: Financial tech innovator Neurogine MPEX (C) Ltd has partnered Myanmar’s CB Bank PCL to revolutionise the merchant onboarding process using mobile-centric platform, Neurogine nMerchant. Neurogine Chief Executive Officer, Owen Chen said the collaboration aims to drive Myanmar’s economic growth by supporting micro, small and medium-sized enterprises (MSMEs), which contribute 36% to the country’s gross domestic product (GDP). He said with MSMEs representing 99.4% of businesses in Myanmar, the partnership focuses on enhancing their access to financial services through mobile technology. “By streamlining the merchant registration process, Neurogine nMerchant enables CB Bank to rapidly onboard new businesses, providing them with easier access to financial services,” said Chen in a statement. He said the platform significantly reduced paperwork, accelerating turnaround times and improving efficiency for CB Bank and its merchant partners. He added that the nMerchant platform allows merchants to accept payments using quick response (QR) codes and integrates with Neurogine n2Tap, Malaysia’s first software point-of-sale solution certified by the Payment Card Industry Security Standards Council. “With an intuitive interface, the platform supports CB Bank to acquire and manage merchants while enhancing customer experiences. “In addition to improving efficiency, Neurogine nBank enables CB Bank to adopt a data-driven decision-making approach, reducing operational costs and mitigating risks,” Chen said. He said mobile device registration eliminates the need for physical bank visits, expanding access to financial services in regions such as Mandalay, Ayeyarwady, Bago, Sagaing, and Yangon. CB Bank Managing Director (Head of Merchant Services) U Zayar Aung, highlighted the collaboration’s role in advancing Myanmar’s digital transformation. “CB Bank is committed to supporting the growth of Myanmar’s MSMEs, and this partnership with Neurogine MPEX is a significant step forward,” he said. “We are confident that Neurogine nMerchant will be a game-changer for the Myanmar market,” he said. CB Bank, established in 1992, is one of Myanmar’s largest banks, employing 9,000 people and operating 220 branches. It was the first in Myanmar to offer Visa and Mastercard transactions at ATMs and introduced Internet banking services for businesses. — BERNAMA

KUALA LUMPUR: Bursa Malaysia’s fundamentals remain strong, even as global equities fall in response to a softer-than-expected US jobs report that heightened recession fears. UOB Kay Hian Wealth Advisors Sdn Bhd Head of Investment Research, Mohd Sedek Jantan said the global rout was merely due to panic selling and overreaction among investors, with the ultimate driver for the decline largely influenced by the substantial sell-off in Japan, where the Nikkei 225 plummeted by more than 12%. “Investor confidence has also crumbled due to the surge in the yen. The latest US Institute of Supply Management (ISM) data and job reports have sparked discussions over the weekend regarding the likelihood of a US recession based on the Sahm Rule,” he explained. The Sahm rule signals a recession when the three-month moving average of the national unemployment rate rises by 0.5 percentage points or more, relative to its low during the previous 12 months. According to the US government, the US hiring slowed to 144,000 jobs in July, missing expectations. The unemployment rate rose to 4.3% versus the expected 4.1%, its highest level in nearly three years. On top of that, Mohd Sedek said the perception that the strengthening ringgit leads to reduced profits in certain sectors and makes stocks more expensive has also exacerbated the situation. “If the heavy selling reduces tomorrow, the FTSE Bursa Malaysia KLCI (FBM KLCI) may trade between 1,590 and 1,600 levels. The market will rebound as a drastic drop or drastic spike is always temporary and not sustained,” he added. Despite the bearish market performance, he highlighted that the technology and financial sectors remained attractive. This week, several defensive companies are scheduled to release their earnings reports, and will likely support the US equity market. “These announcements could foster a sense of calm in the markets,” he said. Top US pharmaceutical companies Amgen, Novo Nordisk and Eli Lilly are scheduled to release their second-quarter results this week. At 4.02 pm yesterday, the FBM KLCI lost 4.36% or 69.69 points to 1,541.36, off its intraday low of 1,532.24 during the mid-afternoon session. Market turnover grew to 8.03 billion units worth RM6.40 billion. — BERNAMA

KUALA LUMPUR: The accumulated losses borne by MARA Incorporated Sdn Bhd (MARA Inc) decreased by 3.8% from RM297.63 million in 2021 to RM286.30 million in 2022, according to the 2024 Auditor-General’s Report (LKAN) Series 2. The report said that this was contributed by the improved financial performance of the company, recording a pre-tax profit of RMI1.67 million for 2022. “This good financial performance was contributed, among others, by gains from property investment recorded in 2022,” it said. However, the report said that at the company level, MARA Inc recorded shareholder deficits for the assessed periods, namely in 2022 amounting to RM115.73 million, 2021 (RM114.06 million) and 2020 (RM66.82 million). It said the main factors causing shareholder deficits were the impairment of asset values related to investments in subsidiary companies, outstanding balances within the company, and trade creditors. Further analysis found that total assets exceeded total liabilities for 3 years, ranging from RM23.32 million (8.7%) to RM51.62 million (20%) but current liabilities exceeded current assets with ratios between 0.11 and 0.13. “Despite an improvement in financial performance with pre-tax profits and a reduction in accumulated losses in 2022, the financial position of MARA Inc remains less stable due to its shareholder deficit and high current liabilities,” it said. The report also said that from the financial years 2020 to 2022, MARA Inc did not pay any dividends to MARA Corporation Sdn Bhd (MARA Corp). MARA Inc justified its non-payment of dividends to MARA Corp during this period due to current-year losses caused by the impact of the Covid-19 pandemic and high net current liabilities. Meanwhile, MARA Inc has only settled RM9.1 million (4.6%) of loans from MARA out of the total amount of RM199.7 million obtained in 2012, 2013, and 2014 for development projects and property purchases abroad. It added that the remaining loan balance of RM190.60 million would be settled through the implementation of Phase 3 Rationalisation Plan approved by the MARA Council on Aug 15, 2022, involving the restructuring of loan repayments which resulted in the transfer of properties amounting to RM174.24 million to MARA. This restructuring consequently reduced MARA Inc’s debt to RM16.36 million, and the remaining loan balance must be settled through the company’s operational income. — BERNAMA

BEIJING: As global trade continues to develop, cross-border e-commerce has emerged as a vital link connecting consumers and businesses around the world. In this context, user loyalty and repurchase rates have become crucial indicators for assessing the competitiveness of cross-border e-commerce platforms. To gain a deeper understanding of this phenomenon, DHGATE Group has collaborated with The University of Hong Kong (HKU) to release a white paper titled ‘The Cross-border E-commerce Repurchase Revolution: Consumer Behaviour Insights and Market Opportunities’. The white paper aims to explore effective strategies for enhancing user loyalty and repurchase rates, providing guidance for the sustainable development of the cross-border e-commerce industry. The report comprehensively examines the current state of user loyalty and repurchase behaviour in cross-border e-commerce. Through data analysis, the authors discovered that, despite the ongoing expansion of the cross-border e-commerce market, improving user loyalty and repurchase rates presents several challenges. These challenges include the diversification of user needs, the differentiation of shopping experiences, and the cultivation of brand loyalty – all of which have become pressing issues for cross-border e-commerce platforms to address. Building on these findings, the white paper proposes 3 core strategies to improve user loyalty and repurchase rates: Optimising traffic strategy and allocation mechanisms The short-term goal is to optimise traffic attraction and distribution mechanisms to support sellers’ branding efforts and multi-platform sales channels, thereby reducing operational risks. Provide sellers with traffic support to address the conflict between product homogenisation and buyers’ personalised demands. Establish a rational traffic distribution mechanism that supports dedicated sellers and products with high potential, ultimately enhancing the platform’s attractiveness and competitiveness. Localising warehousing and logistics The long-term goal is to encourage sellers to integrate their industrial chains, establish overseas warehouses, and develop their own logistics systems. The overseas warehouse model can improve logistics contract fulfilment efficiency, reduce operating costs, and enhance overall fulfilment performance. By building or connecting logistics resources, platforms can enhance the consumer experience, increase user retention rates, attract small-and medium-sized sellers, and strengthen their bargaining power. Driving platform innovation and refined operations Leverage emerging technologies to enable refined operations, reduce operating costs, take advantage of economies of scale, and boost core competitiveness. Strengthen research, development and application of technologies such as artificial intelligence, big data, cloud computing, and blockchain to improve operational efficiency and optimize user experience. For buyers: Offer personalised recommendations and optimized logistics and distribution to enhance repurchase intentions. For sellers: Strengthen supply chain cooperation, reduce transaction costs, provide a wider range of high-quality products, and increase user stickiness. The white paper places special emphasis on the role of technological innovation in enhancing user loyalty and repurchase power. By leveraging artificial intelligence, machine learning, and other advanced technologies, platforms can more accurately predict user needs, implement intelligent inventory management, and optimise pricing strategies. The development of the white paper was spearheaded by DHGATE Group Executive Assistant to the Chairman, Mei Tian and Associate Professor Wei Zhang, Director of the Institute of Digital Economy and Innovation of Business and Economics at the University of Hong Kong. Throughout the compilation process, the white paper’s research team received invaluable guidance and support from Professor Haipeng Shen, Patrick SC Poon Professor in Analytics and Innovation at the University of Hong Kong. The publication of the white paper serves not only as a valuable reference for cross-border e-commerce platforms but also as a guiding light for the healthy development of the entire industry.

SINGAPORE: PT Bank BTPN Tbk (Bank BTPN) is spearheading the bank’s mobile-led consumer banking services with its flagship Jenius, as a pioneer of digital banking in Indonesia. Jenius has partnered with Perx Technologies to transform traditional banking experiences that are purely driven by needs and wants to a fun and game-like experience. By introducing the concepts of gamification and instant gratification into every day personal banking experiences the Perx Loyalty Engagement Platform and Jenius aim to transform and uplift the quintessential thought relationship a consumer has with their lifestyle banking needs. With a diverse array of rewarding experiences, gamified savings milestones and a personalised loyalty programme that keeps rewarding customers for their every action, Jenius aims at driving positive behavioural hacks into the community such as building a nest egg or better managing impulsive spending habits with full transparency. Moving away from existing as ‘just another digital bank’ and transforming into a financial solution for the digital savvy audience Jenius aims to engage its customers beyond their regular banking needs by becoming an enabler to the lifestyle choices its customers make daily. At the core of this partnership lies the goal to drive maximum customer lifetime value through a dynamic and rewarding loyalty program, mobile customer journeys studded with instant gratification and gamification allowing the bank to nudge and influence positive customer behaviour. Driving this customer experience focused personal banking model is an engagement strategy that is continuous and non-transactional. Powering this strategy through the various mobile-first services Jenius offers is the Perx Loyalty Engagement Platform. “As a digital native bank, the app experience is paramount to Jenius’ success. By collaborating with Perx, we are able to leverage innovative technology to provide a fun, personalised, and rewarding experience across all customer touchpoints throughout their entire customer journey. “This is essential to create retention, engagement, and customer-first service experience – which is ultimately what sets us apart from others in the industry,” said Bank BTPN Digital Banking Product & Innovation Head, Febri Rusli. “In the experience economy, digitally savvy consumers expect personalised and meaningful interactions that keep them excited enough to return. We are delighted to deliver these ‘Aha moments’ in every customer journey a Jenius customer will experience going forward. “We are thrilled to partner with Bank BTPN to create and deliver an engaging customer experience for everyone served by Jenius in Indonesia,” said Perx Technologies Founder and CEO, Anna Gong.