EconWatch : Stable domestic growth in 2Q16

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EconWatch : Stable domestic growth in 2Q16

Recent economic indicators suggest that the Malaysian economy remained stable in 2Q16, driven by the consistent demand for households subsequent to a slowdown in 1Q16. The economy has probably bottomed in 1Q16 while full-year growth will likely register an average of 4.3% in 2016. Loans growth for the banking system was broadly unchanged at 6.3% YoY in April 2016 vs. 6.4% in March 2016, following a downtrend since August 2015 when total loans recorded +10.2%. Also, the uptick in broad money supply suggests that the domestic economy is supportive of growth in 2Q16. M3 improved in April 2016 to register +1.5% (vs. a low of +0.9% in March) 2015. Other than that, delinquency on loans slowed for the second straight month in April 2016. Gross impaired loans slipped by 0.1% MoM, following a reduction of 2.2% in March 2016.

The Leading Index (LI) posted a faster rate of contraction in March 2016 and the steepest fall since it registered a decline five months ago. As for the lagging index, growth rate was unchanged on a MoM basis in March 2016 (February 2016: +0.6% MoM) - supported by increased Number of New Vehicles Registered and Number of Investment Projects Approved. Mostly, the upside pressure for 2016 is mitigated by the lacklustre global crude oil prices. On average, full-year inflation is projected to be 2.0% for 2016. Mostly, normalisation of prices has been prevalent effective 2Q16 as the impact of GST abates while inflation is expected to taper further in 2H16 should global crude oil prices remain weak. Delinquency on loans slowed for the second straight month in April 2016. Gross impaired loans slipped by 0.1% MoM, following a reduction of 2.2% in March 2016. The uptick in broad money supply suggests that the domestic economy is supportive of growth in 2Q16. M3 improved in April 2016 to register +1.5% (vs. a low of +0.9% in March) 2015.

Others :

Malt Liquor Sector : Tighter regulations OVERWEIGHT

Plantation Sector : 1Q2016 Earnings Review         UNDER REVIEW

QUICK TAKE

Malt Liquor Sector : Tighter regulations OVERWEIGHT

               

NEWS HIGHLIGHTS

Manufacturing Sector : Scientex’s 3Q net profit jumps 43% as revenue improves

Utilities Sector : Ranhill eyes RM300mil local jobs to reduce NRW

UEM Sunrise : Banking on Gerbang Nusajaya to boost profit

Malaysia Building Society : Allots RM540mil for affordable homes

IHH Healthcare : Khazanah realises value

ECONOMIC HIGHLIGHTS

Malaysia : Expect PMI to remain in the negative region in the near term