The week that was
Q1 GDP NOT AS BAD AS FEARED
THE economy expanded 0.7% in the first quarter ended March 31, the slowest pace since 2009, but not as bad as the market had predicted.
But the movement control order (MCO) that came into force since March 18 to curb the spread of the deadly novel coronavirus (Covid-19) pandemic is set to take a bigger toll, with a “deep contraction” in gross domestic product (GDP) expected in the second quarter.
The economy contracted by 2% on a seasonally adjusted basis compared to the previous quarter.
“The ongoing pandemic has created an unprecedented economic crisis,” Bank Negara governor Datuk Nor Shamsiah Mohd Yunus said on Wednesday.
She said the central bank would provide a revised projection on the economy in the second half of the year, noting that it is “challenging to predict a meaningful forecast range” as there are far too many global and domestic uncertainties.
The government has started to relax the MCO with more businesses allowed to operate under strict conditions amid fears that the economy is losing Rm2.4bil a day due to the restrictions.
Glove makers drive record volume on Bursa Malaysia
MORE than 9.6 billion shares worth Rm5.1bil changed hands on Bursa Malaysia on Wednesday, making it the busiest day on record for the local bourse.
Glove makers dominated the list of most active counters.
HLT Global Bhd, a glove making equipment supplier, saw 321 million shares traded on Wednesday, while more than 500 million warrants changed hands.
World number one glove maker by volume Top Glove Corp Bhd topped the value list on Wednesday with 39 million shares worth more than Rm350mil traded, followed by Comfort Gloves Bhd (Rm240mil) and Hartalega Holdings Bhd (Rm230mil).
The glove making industry is a bright spot in the local economy as worldwide demand for the protective gear continued to climb amid the ongoing Covid-19 pandemic.
The Malaysian Rubber Glove Manufacturers
Association, in a statement late last month, said top producers are ramping up to operate at full capacity following the relaxation of MCO.
Meanwhile, the relatively low prices of glove-making raw materials – latex and nitrile – are expected to boost manufacturers’ profit margin.
Powernet expanding green energy venture
KUMPULAN Powernet Bhd announced on Wednesday it third major green-power contract win so far this year – a Rm208mil project to build a mini hydropower plant in Nepal.
The latest job lifted the group’s order book to Rm1bil, strengthening the group’s outlook for the next three years, managing director Mustakim Mat Nun said.
In June last year, Powernet saw the entry of Datuk Abdul Karim Abdullah and Mustakim as new substantial shareholders.
Within less than a year, they transformed the loss-making garment maker into a profitable green energy company with projects in Malaysia, Laos and Nepal.
Karim is the founder and chief of Serba Dinamik Holdings Bhd – one of the fastest rising engineering group with a massive order book of around Rm17bil.
US Fed’s Powell warns of prolonged economic weakness
THE Covid-19 pandemic is shaping to become the biggest global economic shocks in generations, US Federal Reserve chair Jerome Powell warned on Wednesday, adding that the world biggest economy is facing “extended period” of weak growth and stagnant income.
He also pledged to use the central bank’s powers, if needed, and issued a call for additional fiscal spending in the US.
The US central bank has slashed interest rates to near zero and set up a broad network of programmes to ensure financial markets continue to function during the pandemic.
Powell, however, made it clear that the Fed wouldn’t push interest rates below zero.
His comments came as more state governors in the US are lifting the various restrictions on commerce and activity put in place to slow the spread of the virus.
Attention will be on whether the reopening will lead to a quick return of economic activity or a second wave of infections.