Investment & Market Trends

KUALA LUMPUR: CIMB Thai Bank PCL, a 94.83%-owned indirect subsidiary of CIMB Group Holdings Bhd, saw its net profit fall 5.4% year-on-year (YoY) to 1.29 billion baht in the first half year ended 30 June 2024 (1H 2024). In a filing with Bursa Malaysia, CIMB Thai President and Chief Executive Officer Paul Wong Chee Kin said the decline was mainly due to a 1.7% contraction in operating income and a 7.7% increase in operating expenses, partially offset by a 22.7% drop in expected credit loss. On a YoY basis, he said CIMB Thai Group’s consolidated operating income fell 1.7% to 7.04 billion baht from a lower net fee and service income of 28.3 million baht, due to higher fee and service expenses and a 2.9% decline in net interest income. “Other operating income rose 49.6 million baht, up 3.1% driven by net gains on financial instruments measured at fair value through profit or loss and partially offset by lower gains on sale of non-performing loans,” he said. Operating expenses rose 7.7% YoY to 312 million baht mainly from higher impairment loss on properties for sale as well as taxes and duties but partially offset by lower employee expenses. “Net interest margin over earning assets stood at 2.2% in 1H 2024 compared to 2.7% in 1H 2023 as a result of higher cost of funds,” he added. As at 30 June 2024, total gross loans (inclusive of loans guaranteed by other banks and loans to financial institutions) stood at 251.4 billion baht, an increase of 2.6% from 31 December 2023. Deposits (inclusive of bills of exchange, debentures and selected structured deposit products) stood at 316.1 billion baht, up 1.8%, from 310.4 billion baht in end-December 2023. Gross non-performing loans (NPL) stood at 7.5 billion baht with a lower equivalent gross NPL ratio of 2.9% compared to 3.3% as of 31 December 2023. “The lower NPL ratio was mainly attributed to the sale of several NPLs in 2024, improvement in efficiency on risk management policies and asset quality management, as well as loan collection processes,” he said. Wong said CIMB Thai’s loan loss coverage ratio stood at 129.1% as of 30 June 2024, compared to 124.2% at the end of December 2023. — BERNAMA

KUALA LUMPUR: Malaysia’s economy is estimated to expand by 5.8% in the second quarter of 2024 (2Q 2024), up from 4.2% in the previous quarter and the highest since 4Q 2022’s 7.4%, according to Statistics Department Malaysia (DOSM). For the 1H 2024, Chief Statistician Datuk Seri Mohd Uzir Mahidin said gross domestic product (GDP) rose by 5% versus 4.1% a year ago. “Malaysia’s economy is expected to continue its growth momentum, supported by domestic and export-driven factors, with a positive outlook for the rest of the year,” he said in a statement. The rise in household consumption expenditurę was spurred by the festive and school holidays and the Sumbangan Tunai Rahmah (STR) Phase 2 payment in April 2024, he said. “Furthermore, a total of RM6.98 billion was withdrawn from Employees Provident Fund (EPF) Account 3 (Flexible Account) as of June 2024 to support short-term financial needs,” he said. He also noted that 2Q’s estimated growth was in line with the Industrial Production Index which rose 6.1% and 2.4% in April and May 2024 respectively, versus a year ago. The services sector drove economic performance for the quarter under review, with most key sectors showing better growth than the previous quarter. The statement said the services sector rose to 5.6% in 2Q 2024 (1Q 2024: 4.7%), bolstered by wholesale and retail trade, transportation and storage and finance and insurance sub-sectors. Wholesale and retail sales value rose by 6.6% in April and by 7.1% in May year-on-year. Mohd Uzir said the manufacturing sector grew to 4.7% in 2Q 2024 from 1.9% in the previous quarter, supported by growth in mainly non-metallic mineral products, basic metal and fabricated metal products and petroleum; chemical, rubber and plastic products. The construction sector maintained a double-digit 17.2% growth, driven by strong performance across all sub-sectors, notably in civil engineering and specialised construction activities versus 11.9% in 1Q 2024. “The agriculture sector rose 7.1% in the quarter under review against 1.6% in 1Q 2024, due to remarkable growth in the oil palm sub-sector. The mining and quarrying sector eased to 3.3% versus 5.7% in 1Q 2024 as the natural gas sub-sector moderates. According to Prime Minister Datuk Seri Anwar Ibrahim, this will enable the country to rise as a strong nation and that under the MADANI Economy, the government has promised better job opportunities, training and technology transfer to move the country towards digital and energy transition. “Malaysia has broken through the wall of uncertainty by registering an amazing 5.8% growth in the 2Q 2024, beyond normal expectations and projections presented by all parties. “I’m confident that with our cooperation and focus on economic development, we will succeed,” he said on his official X page, thanking the people, workers, professionals and investors who continue to believe in the direction of the MADANI Economy. According to the DOSM website, the official 2Q 2024 numbers will be announced on 16 August 2024. — BERNAMA

KUALA LUMPUR: Bank Negara Malaysia (BNM) and the Securities Commission (SC) will establish an integrated dispute resolution scheme (IDRS) to be known as the Financial Markets Ombudsman Service (FMOS) for the financial and capital market sector. In a written response posted on Parliament’s website, the Finance Ministry (MOF) said IDRS will be established in 2025 via a merger between the Ombudsman for Financial Services (OFS) and the Securities Industry Dispute Resolution Centre (SIDREC), offering alternative dispute resolution services for the capital market sector under SC regulation. IDRS aims to increase the level of effectiveness of dispute resolution for the financial consumer and investor. According to the ministry, the merger is expected to increase the operational synergy of the scheme while ensuring that the resolution process is made easier, smoother and free. This will contribute to the government’s efforts to protect the rights of those using financial institutions and its failure to raise public confidence in the Malaysian financial system. MOF said OFS resolved nearly 32,000 disputes free of charge in 19 years. In 2023 alone, OFS received 1,246 disputes, with 62% of them related to the banking industry and 33% to the insurance and takaful industry. — BERNAMA

KUALA LUMPUR: A total of 3.61 million (27.8%) of the total 13.01 million Employees Provident Fund (EPF) members under the age of 55 have chosen to have the initial amount in their Flexible Accounts and have transferred a total of RM11.52 billion as of 24 June 2024. Meanwhile, the Ministry of Finance reported that a total of RM5.12 billion has been transferred to the Retirement Account. The MoF said this initiative is a proactive step to help people cope with the changing employment landscape, ageing population as well as changing needs according to the life cycle of EPF members. “Among members who chose to have an initial amount, a total of 41,000 members who before the transfer had not achieved the basic savings level according to age have now reached the basic savings level according to age following the transfer of part of their Sejahtera Account savings to the Retirement Account,” it said. The MoF said the EPF will remain committed to continue to provide competitive returns to contributors in an effort to increase their retirement savings balance and prevent contributors from falling into the crisis of old age poverty. “Members’ savings balance depends on their trend of contributions and withdrawals,” it said. Consistent contributions and withdrawals that are only made for reasonable purposes will help members build their retirement savings, it added. — BERNAMA

KUALA LUMPUR: The Asian Development Bank (ADB) has revised its economic growth forecast for developing Asia to 5% from a previous projection of 4.9% in April and maintained the 2025 growth projection at the same percentage. In its Asia Development Outlook for July 2024 recently released, ADB said resilient domestic demand, along with improved exports and manufacturing, will support growth this year. The region’s 2024 growth forecast was marginally adjusted upwards in tandem with those of the Caucasus, Central Asia and East Asia. ADB Said the headline inflation in developing Asia is forecast to ease further to 2.9% this year from 3.3% last year and stabilise at 3% in 2025. “Inflation continued to moderate toward pre-pandemic levels, mainly due to the lagged effects of monetary policy tightening and a slight easing of global food prices. “Meanwhile, growth projections remain broadly unchanged with downside risks persisting, including heightened geopolitical tensions, trade fragmentation and uncertainties related to elections in major economies,” it noted. For Southeast Asia, the growth forecast is maintained at 4.6% this year and 4.7% in 2025, while for the Pacific, it remains at 3.3% in 2024 and 4% in 2025. The ADB also pointed out that interest rates in the United States (US) and other advanced economies continue to shape the outlook, subject to several downside risks. “Uncertainties on the US election outcome, elevated geopolitical tensions and trade fragmentation, property market fragility in China, as well as weather-related events could hurt growth. “Meanwhile, the La Niñna is an upside risk due to expected higher rainfall and cooler temperatures,” it added. As for Malaysia, the ADB maintained its forecasts of a 4.5% growth for 2024 and 4.6% for 2025. It noted that Malaysia’s GDP grew by 4.2% in the first quarter of 2024, supported by strong private consumption (+4.7%) and continued improvements in employment and wages. It said investments also posted strong growth, underpinned by solid infrastructure investment (11.9%) and spending on machinery and equipment (8.9%). Tourism arrivals continued to rebound (32%), along with growth in accommodation, transport, real estate, and construction. The bank added that manufactured exports posted a modest recovery (2.4%), supported by strong export growth from liquid natural gas (4.2%) and crude petroleum products (13.3%). — BERNAMA

NEW DELHI: India and Russia aim to grow their annual trade by almost 54% within 6 years as the 2 countries focus on expanding their economic relations. During his visit to Russia, Indian Prime Minister Narendra Modi had wide-ranging discussions with President Vladimir Putin on boosting cooperation in various fields. With Russia being India’s top crude oil supplier, the energy sector figured prominently in their talks. They agreed on more cooperation in nuclear energy, oil refining, petrochemicals and energy investments, according to a joint statement. The two sides aim to raise the volume of trade in agricultural products, food and fertilisers, with a target of US$100 billion in overall annual trade by 2030. Bilateral trade reached US$65 billion in the financial year ending March 2024, with Russian exports to India totalling US$60 billion. Russia and India agreed to continue discussions on removing trade barriers, including the possibility of a free trade agreement between India and the Eurasian Economic Union (EAEU). “We have had one round of discussion between the two countries and it is expected that this would be expedited in months ahead,” Indian Foreign Secretary Vinay Mohan Kwatra said at a press conference about the prospects for an FTA. The two countries also agreed to grow interaction in the fields of infrastructure development, transport engineering, automobile production, shipbuilding, space and other industrial sectors. They will also facilitate the entry of companies into each other’s markets by creating subsidiaries and industrial clusters. Another joint statement stated that the Russia-India partnership in the military sector is ‘reorienting presently to joint research and development, co-development and joint production’ of arms and equipment. “Both sides agreed to encourage joint manufacturing in India of spare parts, components, aggregates and other products for maintenance of Russian origin arms and defence equipment,” it said. In the nuclear sector, they noted the progress achieved in the construction of the remaining nuclear power units at Kudankulam in the southern state of Tamil Nadu. The Kudankulam Nuclear Power Plant developed in collaboration with Russian state nuclear firm Rosatom is India’s largest such facility. It will have 6 units of 1,000MW capacity each and units 1 and 2 are operational. Russia and India are discussing another site for building more nuclear power plants. — BERNAMA