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KUALA LUMPUR: HSBC has forecast Malaysia’s gross domestic product (GDP) growth at 4.5% for 2024, slightly above consensus with an upside risk. Its co-head of Global Research Asia and Chief Asia Economist, Frederic Neumann said the forecast was supported by the country’s robust economic performance and the incoming inflows of foreign investments. “We also expect a pickup in trade over the second half (2H) of this year, benefitting mainly from consumer electronics,” he said in the HSBC 2H 2024 Asian Outlook webinar. Neumann said Southeast Asian countries, including Malaysia, have continued to perform well in their economies, with no sign of financial stress despite rising interest rates. He also noted that Malaysia’s exports were doing quite well, which was surprising given the global backdrop of weaker growth. “Besides, the GDP forecast will also be bolstered by the gradual turnaround in the trade cycle and an additional boost from the tourism sector. “With the global demand from consumers for electronics accelerating notably, this should also help countries in ASEAN, particularly Malaysia and Vietnam. We remain quite positive on trade going forward,” he said. HSBC has forecast Asia’s economy to grow 4.9% for the full year of 2024. Neumann said HSBC believes that the US Federal Reserve (Fed) cutting interest rate will occur this September, which will be a shallow easing cycle for most central banks in the region. It also maintained its view that BNM is likely to hold its policy rate at 3% in 2024, and recently, it removed its call for a 25 basis point rate cut in the first quarter (1Q) of 2025. “For Malaysia, the possibility of a rate hike is higher than a rate cut, although neither is our central case,” he said. Meanwhile, HSBC head of Asian FX Research Joey Chew said the ringgit has been an outperformer and has been trading stable since February this year, although other Asian currencies continue to weaken against the US dollar. “Something that may help the ringgit later is the ongoing change to the fuel subsidy programme. This is important for fiscal sustainability. “For the ringgit too, there could be a direct impact if higher prices help to curb consumption. Malaysia’s trade deficit in petroleum products is not at an all-time high,” she said, adding that the ringgit is forecast to be at 4.68 for year-end. Currently, the ringgit is trading around 4.67 to 4.68 against the greenback. HSBC’s Head of Equity Strategy (Asia Pacific), Herald van der Linde said the Malaysian stock market has also performed better than initially anticipated. “To a larger extent, the story of Malaysia is the new supply chain that is being built up and the data centres being developed. So we are seeing strong performance for the utility stocks,” he said. Van der Linde said Malaysia is well positioned to benefit from the rise in data centres amid increased demand for cloud and AI services, as large tech giants already invest heavily in the market. “Overall, this means that Malaysia’s performance has been quite specific to certain sectors, such as small-cap and semiconductor segments. To us, it is an alright market,” he said. Van der Linde added that HSBC forecasts the FBM KLCI to be at 1,680 level by the end of 2024. — BERNAMA

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