Investment & Market Trends

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

KUALA LUMPUR: The Human Resource Development Corporation (HRD Corp) should take into account audit findings from the Public Accounts Committee (PAC) to beef up governance of its funds, said Malaysian Employers Federation (MEF) President Datuk Dr Syed Hussain Syed Husman. “We hope these audit findings will strengthen HRD Corp’s governance of the fund. We need better quality people in management, technology and better processes,” he explained. Syed Hussain was commenting on the PAC’s findings of weakness in HRD Corp management due to dubious real estate deals and high-risk investments. According to reports, the PAC also said there was no Bank Negara Malaysia representative in the investment panel, which is against the Human Resources Development Fund Act 2001. “As the funds are getting bigger, we need more competent investment-related people in the committee,” he said, adding that HRD Corp’s act allows them to set up an investment committee. Syed Hussain said that with better management and a better focus on training and development, HRD Corp will be one of its kind in the world. “As a member of the International Labour Organisation (ILO), we have not found any country that has set up such a fund. Malaysia is a leader in this area of talent development. “Hence, HRD Corp can only get better and become a role model for Human Resources development,” he added. Syed Hussain also noted that despite the ongoing investigation by the Malaysian Anti-Corruption Commission (MACC) following the PAC findings, credit should be given to HRD Corp for achieving a stable financial position, as acknowledged in the PAC Report 2/2024. HRD has recorded a cumulative profit of RM389.95 million as of 31 December 2022. Syed Hussain said that HRD Corp’s financial stability would help strengthen its human capital training programmes, which are needed by companies operating in Malaysia. — BERNAMA

KUALA LUMPUR: Alliance Bank Malaysia Bhd is optimistic that the banking industry is well-positioned to progress and navigate the potential headwinds with steady domestic fundamentals and an outlook that remains conducive to sustainable economic growth. In a joint statement by Chairman Ahmad Mohd Don and Group Chief Executive Officer Kellee Kam, Alliance Bank will continue delivering on commitments to putting the customers first with greater value propositions and innovative digital transformation, while remaining adaptable to the changes within the operating environment to fulfil growth ambitions under Acceler8 strategy. “Through the Acceler8 strategy, we diversified our portfolio, gaining access to new markets and consumer segments. “In the financial year 2024 (FY24), we successfully grew the overall bank loan market share from 2.41% in FY23 to 2.58% in FY24, driven by higher loan volumes in the small and medium enterprises (SME), consumer and corporate segments,” they said in the bank’s annual report 2024. They also said the bank focused on efforts to tap into new market segments and business verticals, regional expansion, championing sustainability, as well as driving synergies and value creation through digital innovations and partnerships. On becoming the regional champion, they noted that the bank focused on strengthening its market presence and reach across the country, particularly in key economic growth corridors such as Penang and Sarawak in FY2024. “By becoming the preferred ‘Bank for Life’ to consumers, businesses and local communities that we serve, we recorded strong growth of 48% year-on-year (YoY) in deposits and 18% YoY in loans across these states,” they said. They also said Alliance Bank will continue reinforcing its core business segments in these geographies, with Johor being added as one of the key focus areas in FY25. “Our regional expansion plans have been progressing successfully with the opening of new branches in Saradise, Kuching and soon at Jalan Kelawai, Penang.” they said. They said the bank will in FY25 continue to outfit and energise its branch network with the bank’s refreshed brand outlook to fortify the Alliance Bank’s positioning. — BERNAMA

KUALA LUMPUR: Kenanga Investment Bank Bhd has maintained its ‘overweight’ call on the banking sector, buoyed by improved economic prospects driven by infrastructure projects and investments. In a note, the investment bank said market tailwinds such as ongoing loan growth, gross domestic product improvement and better margin retention, are expected to continue overshadowing industry headwinds like inflationary pressures and a weaker ringgit. “We believe this will likely result in fewer challenges to the sector’s resilience. The sector remains appealing due to attractive dividend yields of six to seven per cent on most stocks, coupled with lower inherent sector volatility compared to other industries,” it said. Kenangas top picks for the third quarter of 2024 include CIMB Group, which has achieved a return on equity of approximately 11% and aims to sustain this growth long-term with a strengthened presence in both local and regional markets. Additionally, the research firm said CIMB boasts a dividend yield nearing mid-6% levels, the highest among its top peers. RHB Bank is also favoured for its expected leading dividends of 7% to 8% and the potential public entry of its associate, Boost Bank, which could attract significant interest in the near term. For small-cap banks, Alliance Bank Malaysia remains a favourite due to its solid fundamentals comparable to larger peers. Meanwhile, MIDF Amanah Investment Bank maintains a ‘buy’ call on Public Bank with an unchanged target price (TP) of RM4.78 as of 28 June 2024 when the stock price stood at RM4.02. The firm cites improving dividend payouts, anticipated major writebacks in the financial year 2024, as well as SMEs’ loan growth as supporting factors. Similarly, MIDF Research maintains a ‘buy’ call on Hong Leong Bank with an unchanged TP of RM21.38, with the stock priced at RM19.20 on 28 June 2024 noting its strong cost-to-income ratio and robust asset quality. Although HL Bank’s associate, Bank of Chengdu (BoCD) is expected to see moderated earnings, it remains a solid growth driver, MIDF said. Meanwhile, Maybank Investment Bank Bhd (Maybank IB) said the industry loan growth moderated to 5.8% in May 2024 from 6.1% year-on-year in April 2024, aligning closely with their full-year forecast of 5.5%. Maybank IB maintains a ‘positive’ outlook on the sector and recommends buying shares of AMMB Holdings, CIMB Group, Alliance Bank, Public Bank, Hong Leong Bank and Hong Leong Financial Group, in that order of preference. — BERNAMA