MONTHLY NEWS SCAN

Tinjauan Berita Bulanan Compiled by IDS

Vol. 25 Issue 2 IDS Online http://www.ids.org.my 1 – 29 February 2020

HIGHLIGHTS Dow falls more than 4% amid China’s official Purchasing FOCUS coronavirus stock rout: Financial Managers’ Index (PMI) fell to a markets suffered a sixth day of losses record low of 35.7 in February from • A global rout is a great time for a on recently, as traders dumped shares 50.0 in January, the National Bureau command economy like China on fears that the spread of coronavirus of Statistics said on Saturday (Feb 29), • Coronavirus poses risks to fragile will hobble the global economy. In the well below the 50-point mark that recovery in global economy: IMF US, the Dow Jones plunged nearly separates monthly growth from • Economic stimulus package 1,200 points to lose 4.4%. It was the contraction. Analysts polled by necessary to ensure growth sharpest points-drop in history. The Reuters expected the February PMI to • Malaysia’s power struggle puts S&P 500 ended 4.4% lower, while the come in at 46.0. (29 February, The economy’s outlook at risk Nasdaq dropped 4.6%. Earlier, Straits Times) • RM5b green venture a world first London's FTSE 100 finished 3.5% • State Govt can sustain economic S. Korea keeps rates unchanged, growth – CM lower, while Japan's Nikkei 225 led lowers growth outlook: South Korea Asian losses, falling more than 2%. kept interest rates unchanged INTERNATIONAL (27 February, BBC News) yesterday, dashing expectations for a ANTARABANGSA cut even as it downgraded the growth Brexit complicates EU budget outlook amid mounting fears the A global rout is a great time for a plans: EU leaders are meeting in coronavirus outbreak could derail command economy like China: In Brussels this week to discuss the Asia's fourth-largest economy. times of distress, a centralised bloc’s future budget plans. These Acknowledging threats from a financial system can go a long way. negotiations are always challenging, prolonged outbreak, Bank of Korea Global investors, bruised by an ugly tending to pit net payers against net (BOK) governor Lee Ju-yeol stressed week of asset selloffs, can perhaps beneficiaries. There are proposals the limits of monetary policy and consider buying the dip - but only in from the European Commission and called for government spending and China. In the past, if the US sneezed, the Parliament that some countries more targeted measures to deal with emerging markets would soon be in think involve spending too much. This the slowdown. (28 February, The the emergency room. Not this time. time, the talks are further complicated Straits Times) While the S&P 500 Index is heading by the departure of the UK, which was for its worst week since the global a large net contributor. (20 February, UK economy saw zero growth at the financial crisis, China has been BBC News) end of 2019: The UK economy saw relatively Zen-like, despite being the no growth in the final three months of 2019, as manufacturing contracted for Japan’s factory activity shrinks at epicentre of the coronavirus outbreak. the third quarter in a row and the fastest pace since 2012 on The ChiNext index, in particular, is service sector slowed around the time still up 16 per cent this year, even after coronavirus jolt: Japan’s factory of the election. The Office for this week's heavy selling. (28 activity suffered its steepest National Statistics (ONS) said the car February, The Straits Times) contraction in seven years in industry had seen a particularly weak February, as the widening fallout from quarter. The ONS figures also Coronavirus poses risks to fragile the coronavirus outbreak in China showed the economy grew by 1.4% in recovery in global economy: IMF: reinforced the risk of a recession in the 2019, marginally higher than the 1.3% The coronavirus epidemic has already world’s third-largest economy. The rate in 2018. Recent surveys have disrupted economic growth in China manufacturing downturn offers the suggested that the economy has clearest evidence yet of the and a further spread to other countries picked up in the new year. (11 epidemic’s damaging effects on February, BBC News) could derail a “highly fragile” global growth and businesses, and is projected recovery in the global likely to ramp up pressure on Japanese Russia’s economic growth at 1.3% economy in 2020, the International policymakers to increase stimulus. (21 in 2019, slightly above Monetary Fund warned. In a note for February, Reuters) expectations: The Russian economy G20 finance ministers and central grew 1.3% in 2019, preliminary data bankers, the global lender mapped out China’s factory activity posts from the statistics service showed, many risks facing the global economy, record contraction as coronavirus slightly exceeding expectations. including the disease and a renewed bites: Factory activity in China Analysts polled by Reuters in late spike in U.S.-China trade tensions, as contracted at the fastest pace on record 2019 expected Russia’s gross well as climate-related disasters. (19 in February, highlighting the damage domestic product to expand 1.2%. The February, Reuters) from the coronavirus outbreak on the central bank predicted that the world’s second-largest economy. economy would grow by no more than 1.3%. (3 February, Reuters) 1 – 29 February 2020 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 1 Malaysia will be undertaking Consumer confidence remains NATIONAL extensive reforms of the investment low: The consumer confidence index NASIONAL process in 2020: MITI: Malaysia (CCI) has declined for the fifth will be undertaking extensive reforms consecutive quarter since its all-time Economic stimulus package in the investment process in order to high after the 14th General Election, necessary to ensure growth: The improve the ease of doing business for both foreign and domestic investors in as more Malaysians remain economic stimulus package is apprehensive about job prospects. At necessary to ensure Malaysia’s 2020. The Ministry of International 107 points, Malaysia fell just outside economic growth will remain stable as Trade and Industry (MITI) said the government’s revenue from direct domestic investors, in particular, will the top 10 most optimistic countries, taxation fluctuates with the be encouraged to aggressively pursue placing 11th on the index, according performance of the economy. Affin export opportunities in new overseas to Nielsen. “In the fourth quarter of Hwang Capital analysts Alan Tan and markets. Under the leadership of 2019,70% of Malaysians believed that Kevin Low believe the government minister Datuk Darell Leiking, the the country is in a recession, down will be reverting back to the fiscal ministry has taken on board slightly from 73% posted in the constructive feedback offered by consolidation path when the economic previous quarter; 37% were optimistic investors and other stakeholders on about an economic recovery in the environment stabilises. Malaysia’s how to improve investment process in gross domestic product (GDP) is order to better drive economic growth next 12 months, which is higher than expected to grow between 3.2 per cent towards achieving Malaysia’s vision 34% in the third quarter of 2019. (19 and 4.2 per cent this year due to the of Shared Prosperity 2030. (14 February, The Star) impact of Covid-19 outbreak. (28 February, Business Times) February, Business Times) Malaysia can be electric car hub: UK sees Malaysia as possible Malaysia has the potential to be an Malaysia’s power struggle puts gateway to Asia-Pacific electric vehicles (EV) and plug-in economy’s outlook at risk: trade: Britain, promoting itself as a hybrid electric vehicles (PHEV) hub, Malaysia’s political upheaval is willing trade partner for the Asia- Proton Holdings Bhd deputy chief jeopardising the economy’s outlook at Pacific region, is seeking close executive officer Datuk Radzaif a time of heightened global risks and alignment with Malaysia as its former Mohamed said. But this requires the brewing discontent among locals colony considers ratifying an 11- about rising living costs. The ruling member Pacific trade pact, the UK’s local vendor community to develop coalition collapsed Monday amid a top diplomat said recently. Pushing new skills and invest in advanced power struggle between 94-year-old the tagline “Global Britain is open for technologies, allowing them to make a Prime Minister Tun Dr Mahathir business“, the UK has launched an quantum leap to become a global Mohamad and his planned successor. aggressive campaign to set up new supplier. Therefore, Radzaif said the The political uncertainty is stalling trade partnerships after it formally National Automotive Policy 2020 economic policy, including a stimulus quit the European Union at the end of (NAP2020) must take a holistic view package that was due to be unveiled January. Malaysia was the final stop regarding EV and PHEV by Dr Mahathir on Feb. 27 to counter in a four-nation tour of the Asia- encompassing multiple areas. (20 the Covid-19 coronavirus outbreak. Pacific by British Foreign Secretary February, Business Times) Now, that set of incentives won’t be Dominic Raab, who described the announced in time as it hadn’t been Comprehensive and Progressive Govt to expedite investment Agreement for Trans-Pacific approved by the previous cabinet, said projects worth RM21 bln to address , who served as deputy Partnership (CPTPP), representing more than 13 per cent of global gross COVID-19 impact: The government trade minister. (25 February, The Star) domestic product, as a “priority” for will expedite the implementation of Britain. (12 February, Business development projects worth RM21 World Bank reviewing Covid-19 Times) billion involving government-linked impact before revising Malaysia’s companies (GLCs) and public GDP growth target: The World Malaysia’s total trade eases 2.5 pct agencies to address the impact from Bank is in the midst of reviewing the to RM1.83 trillion in 2019: the Covid-19 outbreak. Interim Prime economic impact of the Covid-19 Malaysia’s total trade performance in Minister Tun Dr outbreak on Malaysia’s economy 2019 eased 2.5 per cent to RM1.835 when announcing the economic before deciding whether to revise the trillion from RM1.876 trillion stimulus package worth RM20 billion country’s gross domestic product recorded in 2018, according to themed "Strengthening Confidence, (GDP) growth target. In principle, the International Trade and Industry Stimulating Growth, Protecting World Bank is looking at a GDP Ministry. Its deputy minister Dr. Ong Jobs” today, said the move was taken growth of 4.5 per cent in 2020 for Kian Ming said the lower trade was to further increase the confidence of Malaysia. Its Global Knowledge and dragged by softer global demand due Research Hub country manager to trade tensions and unfavourable the business community. Dr Mahathir (Malaysia), Dr Firas Raad said a external economic conditions. “The said the investment projects in 2020 revision was likely in light of the decline in total trade was also due to that will be expedited included by the “evolving situation”. “Everybody is lower demand from Malaysia’s major Ministry of Energy, Science, still looking at the impact and flow trading countries, especially with Technology, Environment and channels,” he told reporters after the Singapore, Hong Kong, France, Climate Change (MESTECC) which launch of the ‘Practitioner’s Guide to Thailand and Japan,” he said at a press will open for bids quota of 1,400 Innovation Policy’ report in Kuala conference on Malaysia’s trade megawatts for solar energy Lumpur. (18 February, Business performance. (4 February, Business generation. (27 February, ) Times) Times) 1 – 29 February 2020 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 2

cooking oil for the market at an Water woes of 2,000 Tenom farmers LOCAL affordable price, thus benefiting the to end: Water supply issues faced by TEMPATAN people. (4 February, New Sabah over 2,000 farmers from seven Times) villages in Lagud Seberang here will RM5b green venture a world first: be resolved once dredging and The State Government is looking into City public transport system to be reclamation of the river bank to the the possibility of being the first in the upgraded – CM: Sabah’s Chief water pump house is completed. State world to use biotechnology to convert Minister Datuk Seri Mohd Shafie Infrastructure Development Minister tropical tree waste into plastic Apdal said the government would Datuk Peter Anthony said about resin. Instead of corn and cassava, the upgrade the city’s public transport RM100,000 to RM200,000 will be project called the “Benta X Project”, system to be in line with other cities in allocated by the government to carry is designed to use existing unutilised the region. “The government will out the reclamation works. He said resources for social economic strive to resolve the issue of increasing the government is concerned about the development and engineer industries number of vehicles causing existing people’s sufferings from water away from relying on natural roads unable to meet the demand and shortage in the fields as a result of the also inadequate parking facilities. drought and shallow riverbank. “It is forests. “This is a good joint effort “Therefore, I have directed Warisan which allows us to produce Harta to hold discussions with City for this reason I have made an biodegradable plastic in our country, Hall to find the best way to improve immediate commitment and I estimate because we realise that everywhere, the existing transport system. “I hope between RM100,000 or RM200,000 the world is faced with pollution and that the city’s public transport system to clear the river and drains as a short plastics are among the biggest will be on par with other cities in the term measure after which we will look contributors,” said Chief Minister region,” he added. (3 February, New for a suitable site to place the pump Datuk Seri Mohd . (12 Sabah Times) station,” he said. (17 February, Daily February, Daily Express) Express) RM260 million for repair of 67 State Govt can sustain economic dilapidated schools in Sabah this RM2mil allocated for alternative growth – CM: Chief Minister Datuk year: The Sabah Education and rural water supply: The State Rural Seri Shafie Apdal said the State Innovation Ministry is focusing on Development Ministry has allocated Government is confident that it can addressing problems of dilapidated RM2 million towards the sustain its economic growth even schools, with RM260 million to be implementation of the alternative rural amidst the current global economic spent for repair and rebuilding of 67 water supply programme (BALBA) challenges. While he is aware that the such schools in the state this year. Its this year. Its Minister Datuk Ewon global economy is currently facing minister, Datuk Dr Yusof Yacob said Benedick said the BALBA various problems, he is positive that there are seven categories of dilapidated schools. Those in category programme is among the new Sabah will be able to rise above those seven are declared unsafe and cannot initiatives introduced by the Ministry existing issues. “This year, I am very be used, he told reporters after to aid rural residents who frequently focused on our existing economic handing over the Cost of Living Aid face water supply problems. “BALBA growth even though there are (BSH) payment to the recipients here is a water supply programme with problems,I know that the world today. He said there are 1,300 primary alternative methods of treatment economy and this region are facing and secondary schools in Sabah and either using gravity water pipes and problems but don’t tell me that there is 590 of them were categorised as wells or underground water sources at no solution to the problems in the state dilapidated schools. (27 February, The secluded and remote areas from the level. “We have to find ways and Borneo Post) State Water Department’s reticulation means. We believe. We have system”. (15 February, Daily Express) confidence that we can sustain the RM290 million first phase of economic downfall at the global connectivity plan in eight states: level,” said Shafie, who is also State The government will implement the 9,000 more land grants in store for Finance Minister. (12 February, The first phase of the National Fiberisation rural folks: More individual land Borneo Post) and Connectivity Plan (NFCP) in grants are in store for rural folks who eight states including Sabah this year, have long lived in forest reserves in Sabah launches own cooking oil at a cost of RM290 million, said Sabah. Chief Minister Datuk Seri brand: Sabah government’s ambition Communications and Multimedia Mohd Shafie Apdal said at the next of producing a home-grown brand of Minister . He said State Assembly sitting in April, he cooking oil has been realised with the the first phase which began on Feb 15, would state the number of additional launch of Benta Enak Sedap Sehat comprises 152 sites, 50 of which will individual land grants for the purpose (BESS) on Monday (3 February). be established in Sabah in the and the districts involved. He said so Sabah Chief Minister Datuk Seri following areas ― Nabawan, Tenom, far, 1,800 individual land grants had Mohd Shafie Apdal officiated the Keningau, Papar, Tawau, Semporna, been approved to be handed over to Kunak, Beluran, Tongod, Tuaran, launching ceremony at the factory of kampung residents in this category in Kudat, Kota Marudu and Pitas. “The Benta Edible Oil Sdn Bhd, a NFCP is a five-year-plan launched in Keningau. According to him, this subsidiary of Yayasan Sabah’s unit September last year. Under this plan, year, the State Government would be Benta Wawasan Sdn Bhd (BWSB), the government will launch six giving more than 9,000 individual Tawau. Calling it a historic event, initiatives comprising NFCP 1 to 6, land grants to kampung residents who Mohd Shafie said the state, beginning this year. (22 February, have lived for a long time in forest through BWSB, was now processing, Daily Express) reserves. (10 February, Daily Express) bottling and marketing the palm-based 1 – 29 February 2020 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 3

SELECTED FACTS AND FIGURES FAKTA MUTAKHIR Malaysia’s Economic Performance Fourth Quarter 2019

(Source: 12 February, Department of Statistics Malaysia)

Malaysia’s International Investment Position Fourth Quarter 2019

(Source: 12 February, Department of Statistics Malaysia)

Malaysia’s Monthly Rubber Statistics, December 2019

(Source: 10 February, Department of Statistics Malaysia) 1 – 29 February 2020 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 4 Malaysia’s Consumer Price Index, January 2020

(Source: 21 February, Department of Statistics Malaysia)

Malaysia’s Producer Price Index, January 2020

(Source: 27 February, Department of Statistics Malaysia)

1 – 29 February 2020 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 5