RHB Retail Research says Top Glove Corp Bhd may trend higher after it continued holding above the MYR7.08 support.
In a trading note, the research house says as the stock recorded a new 52- week high, the positive sentiment has been enhanced.
“An upbeat bias may emerge above the MYR7.22 level, with an exit set below the MYR7.08 mark.
“Towards the upside, the immediate resistance is at the MYR7.70 level, followed by the MYR8.00 threshold, it says.
Saudi Arabia said Monday it had asked oil giant Aramco to cut its output by an additional one million barrels per day from June, to support prices that have crashed during the coronavirus crisis.
The move will reduce the production of the world’s biggest crude exporter to 7.5 million bpd, the energy ministry said in a statement cited by the official Saudi Press Agency.
Neighbouring Kuwait’s Oil Minister Khaled al-Fadhel said separately that his country would cut an additional 80,000 bpd to support the Saudi initiative.
“Kuwait supports the efforts of Saudi Arabia to restore balance to the oil market,” Fadhel said in a statement on Kuwait News Agency.
Also declaring support for Saudi Arabia was its ally, the United Arab Emirates, which announced a reduction of 100,000 bpd from June.
OPEC and its allies in the OPEC+ group agreed last month to cut production by a record 9.7 million bpd while other producers pledged to reduce their output by around 3.7 million bpd.
Under the deal, Saudi Arabia’s daily production was cut to 8.5 million bpd, the lowest in more than a decade.
Riyadh said the aim of the additional cut was to push OPEC+ members “and other producing nations to comply with committed production cuts and make additional reductions” to stabilise the global oil market, the energy ministry said.
Despite a first round of massive cuts which kicked in on May 1, oil prices remain extremely low, losing around two-thirds of their value this year due to a coronavirus-driven slump in demand.
Prices were further dampened in April by a price war between Russia and Saudi Arabia during which Riyadh’s production soared to a record 12.3 million bpd, pushing stockpiles to unsustainably high levels.
The ministry said that with the latest production curb, the kingdom would have cut 4.8 million bpd from the record output levels in April.
The price of the international benchmark Brent crude is hovering around USD30 a barrel. – AFP
China’s exports saw a shock 3.5 percent rise in April despite the global impact of the coronavirus pandemic, official figures showed Thursday, partly due to rising medical exports.
But analysts warned of weakness ahead as key markets suffer downturns, as well as the brewing threat of a renewed trade war with the United States.
Imports fell 14.2 percent on-year, a steeper drop than last month, according to the Customs Administration.
A forecast of analysts by Bloomberg had predicted an 11 percent dive in exports and a 10 percent plunge in imports.
Exports of medical instruments and devices rose 11 percent in the first four months from a year ago, according to customs data, while most other categories contracted.
ING chief economist for Greater China Iris Pang told AFP that China’s exports of medical supplies provided a boost as the rest of the world grappled with the pandemic.
Pang added that while exports of clothing shrank, sales of textile yarns, fabrics and other products grew, implying they were used to make medical supplies.
Beijing says it has been successful in largely curbing the spread of the virus in the country, and many businesses and factories are now back at work after months of closure.
And Louis Kuijs of Oxford Economics noted that “April shipments may have been boosted by exporters making up for shortfalls in the first quarter due to supply constraints then”.
In the January-February period, the height of China’s coronavirus outbreak, exports plummeted 17.2 percent.
In spite of the bounceback — the first return to positive territory for exports this year — analysts do not expect the trend to last as China’s key trading partners fall into recession.
And although the US and China signed a phase one trade pact in their bruising trade war in January, Julian Evans-Pritchard of Capital Economics warned that “the threat of additional US tariffs on Chinese goods shouldn’t be ignored”.
Customs data showed that in April China’s trade surplus with the US widened from a year ago by 8.8 percent, to around $22.8 billion.
Over the last few months tensions have ramped up again as the two sides exchanged barbs over the pandemic and its origins, with US President Donald Trump recently threatening new trade tariffs against Beijing.
Nick Marro, global trade lead at The Economist Intelligence Unit, said that it could be hard for both sides to meet earlier commitments.
“Shipments from the US remain well below the levels needed to achieve the purchase pledges under the trade accord… with the deterioration in US-China ties, there’s a risk that the US might act brashly,” he said.
In China — already tackling weak overseas demand and a lingering trade war — virus recovery has been slow.
An independent gauge released Thursday, the Caixin PMI, showed that the services sector is still in contraction and below analyst expectations.
There are still some social distancing rules in places and fears about mounting unemployment are hitting consumer confidence.
The daily average of domestic trips over the Labour Day holiday at the beginning of May was half of last year’s total, while daily tourism revenues fell 68 percent.
On Wednesday, Beijing pledged to roll out and improve on policies to keep employment stable, following an earlier series of support measures.
The rebound in exports contrasts against the official Purchasing Managers’ Index data recently, which showed firms reporting insufficient demand and, last month, a sharp drop in new export orders.
Marro said China’s exports data also showed considerable divergence from the rest of the region.
“The government seems committed to publishing positive headline GDP data for the second quarter, with a technical recession likely politically unpalatable,” Marro said.
In contrast, the eurozone economy is expected to contract by a staggering 7.7 percent this year, while the US private sector has lost 20.2 million jobs last month alone, according to payrolls firm ADP.
Analysts have warned of an enormous impact on world trade from the pandemic, which has killed more than 260,500 worldwide.
Oxford Economics says global trade in goods and services could be cut by up to 15 percent in 2020, much larger than the decline during the 2009 global financial crisis. – AFP
Indonesia is drawing up a $1.0 billion rescue plan for struggling national airline Garuda after the coronavirus forced the company to ground most of its planes, Bloomberg News reported Monday.
Under the plan, some $500 million in Garuda debt would be restructured with another $500 million in new loans to help the airline meet operational needs for the next six months, the report said, citing Deputy State-Owned Enterprises Minister Kartika Wirjoatmodjo.
The company was facing the prospect of defaulting on Islamic bonds known as sukuk, due next month, the report said, adding that investors would be offered the option of extending maturities on their investment by three years or a staggered repayment scheme.
“Garuda remains a good company with bright prospects,” Wirjoatmodjo was quoted as saying.
“Its business will remain robust after the outbreak ends.”
Neither the ministry nor the airline responded to AFP’s request for comment on the report.
State-controlled Garuda — which operates a fleet of more than 200 aircraft with its Citilink subsidiary — has temporarily cut employee salaries to help cope with an air travel slump sparked by the global pandemic.
Coronavirus has dealt a crushing blow to the global aviation industry, which has been directly affected by confinement measures and travel restrictions.
Colombia’s Avianca, the second-largest airline in Latin America, filed for bankruptcy protection Sunday in a bid to reorganise its debt due to the unprecedented hit to global air travel. – AFP
The Ministry of Health has identified 70 new cases bringing total number of active cases in the country to 1,504.
With 5,113 recovered cases, recovery rate is at 76 percent.
One death have also been reported. Total deaths from the virus outbreak is currently at 109.
Total number of cases in the country is at 6,726 cases currently.
Alcosm Pte Ltd, together with the President of Baby Product Association of Malaysia, Gwei Tze-Co, has donated RM 550,000 worth of Alcosm 75 percent alcohol wipes Ministry of Health.
The contribution of 25,000 packs of 75 percent alcohol wipes will be distributed to hospital and government clinics nationwide to further protect the medical force.
“We introduced our 75 percent alcohol concentration wipes on the March 31 and have received tremendous support from our Malaysian consumers so we want to give back by supporting the medical teams fighting Covid-19. We also heard of the PPE shortage and even though we are not in the business of personal protective gear, we would like to ensure that the medical force has personal hygiene protection as well,” shared Alcosm Pte Ltd co-founder and managing director Tai Zi Kang.
Tai further urged all frontliners and hospital staff to ensure that they disinfect not only their hands but also personal belongings. Items such as handbags, handphones, keyboards, purses, steering wheels and wallets which are often overlooked contain worrying levels of germs so regular disinfection is important.
The company is the first to launch an optimum alcohol concentration wipes in Malaysia and had garnered a high demand from the local market with more than 20,000 packs sold in less than five days since the launch of its website on March 31. Offline, Alcosm™ wipes are available at most major convenience stores, pharmacies and supermarkets nationwide.
“As we come together in difficult times like this, we hope our initiative today will help our valuable medical line up to protect themselves further in the line of duty,” shared Tai Zi Kang.
Permodalan Nasional Bhd (PNB) president and group chief executive officer (CEO), Jalil Rasheed says the state-owned fund has presented the work-from-home (WFH) option as a permanent option to its staff.
In a series of tweets by the CEO, Rasheed stated that PNB will also be introducing flexi time where employees will choose hours they want to work as long as they are able to deliver their work.
“Work from home is now a permanent option, not just a MCO arrangement. Many have thrived and gave me positive feedback. Some are dying to return to office, which is understandable as WFH is not for everybody. Not every role can be done from home too like drivers and security,” the ceo tweeted.
The work-from-home option was also extended until end of May as schools and childcare centres have not been re-opened.
Return of staff will be deployed over three months in order to ensure not too many staff are in the building at the same time.
Rasheed further said that the momentum of using technology, virtual meetings and digital signature must continue even when staff return.
“As we have WFH as permanent option, most meetings will be hybrid of virtual and in-person,” he said.
PNB will be issuing guidelines to the respective managers on how to manage remote teams and to answer all FAQs as well as to have dedicated people assigned when queries arise.
The move comes as part of a strategic plan PNB had unveiled last week, with one focus area being Organisational Transformation.
By Poovenraj Kanagaraj
According to Mastercard’s global consumer survey, nearly eight in 10 say they use contactless payments. The number of consumers turning to contactless card payments for necessary purchases also saw a significant increase in February and March, due to the Covid-19 outbreak.
79 percent of people worldwide and 91 percent in Asia Pacific say they are now using tap-and-go payments, Mastercard says.
The survey by the financial service provider has shown that the perceptions of safety and convenience have spurred a preference for contactless cards and reminded consumers of the ease of tapping.
46 percent of respondents have swapped their top-of-wallet card for one that offers the contactless service. 51 percent in Asia Pacific have made the swap.
The outbreak has also contributed to the increase in concerns about cash usage and has led to positive perceptions about contactless due to the safety and peace of mind it provides.
82 percent globally view contactless as the cleaner way to pay while 80 percent of respondents from Asia Pacific share a similar sentiment.
“We are in a sustained period where consumers are making purchases in a very focused way. That’s reinforcing contactless use in markets where adoption is more mature and it’s stimulating use in newer markets,” said Sandeep Malhotra, executive vice president, products and innovation, Asia Pacific, Mastercard.
According to the survey, 74 percent globally and 75 percent in the Asia Pacific region believe they will continue to use contactless even after the pandemic subsides.
Malhotra further points out that the three in four people intend to keep using tap-and-go after the pandemic. This he believes is a strong sign that consumers see the long-term benefits of having a safer, cleaner way to pay as well as being more socially responsible.
In recent times, Mastercard has committed to increasing contactless payment limits in more than 50 countries worldwide. The effort on behalf of the financial service provider comes in order to make sure consumers, merchants and small businesses have the resources to maintain operations during the ongoing crisis.
The survey was derived from online interviews with 17,000 consumers in 19 countries worldwide.
The Kuala Lumpur High Court granted an interim Order for the Securities Commission Malaysia (SC) on May 8 to freeze the assets of, among others, Wong Shee Kai (Ricky Wong), who is currently still at-large.
The Order stems from the SC’s suit against the defendants in relation to securities fraud offences involving Bright Packaging Industry Berhad under Section 179 of the Capital Markets and Services Act 2007 (CMSA).
The Order, obtained under Section 360 of the CMSA, prohibits Wong, his mother Teh Sew Wan, and a company owned by them, Wong SK Holdings Sdn Bhd, from dealing with assets and properties to the value of RM169,223,500.00.
In granting the Order, Judicial Commissioner Anand Ponnudurai also required the three defendants to disclose a full, complete and accurate account of their respective assets within and outside Malaysia.
This Order will bind all the defendants and also prohibit any person from knowingly assisting or permitting any dealings with the defendants’ assets and properties.
According to the press statement by SC, under the terms of the Order, banks are not permitted to exercise a right of set off of any
facility they may have given to the defendants.
The High Court further ordered that during the Movement Control Order period, service of this Order on all the defendants is considered valid if it is advertised in an English newspaper.
A copy of the interim order WA-22NCC-171-05/2020 granted by the KL High Court Commercial Division on 8 May 2020 is available here.
Prime Minister Tan Sri Muhiyiddin Yassin has announced that the Conditional Movement Control Order (CMCO) will be extended for another four weeks until June 9.
In his televised address, despite positive results from the measures in place, the extension is regarded as necessary. The Movement Control Order was initially expected to end on May 12.
6.64 million (43.6 percent) of workers have also returned to their jobs and the numbers are expected to increase in the weeks to come.
“I would like to thank state governments that have agreed to re-open their economies, allowing employees to return to work,” the Prime Minister said.
There are currently 10 districts that are under the red zone, with a majority of clusters involving the Setia Alam construction site and factory workers in Pedas, Rembau.
Additionally, the Jalan Othman wet market and its surrounding commercial areas have come under the enhanced movement control order (EMCO) lockdown following a spike in Covid-19 cases.
As for interstate travels, married couples living in separate states can apply for to visit one another. The Prime Minister has also encouraged Sarawak and Sabah in granting the leeway as well.
In regards to the Bantuan Prihatin National aid, the Prime Minister says applications will be extended until May 31 for failed applicants. Appeals can be made directly at the counters.
This comes after a number of appeals have been rejected due to mismatch of records. 10.6 million Malaysia have been offered under the BPN aid.
Families living in the same state and neighbours will be allowed to visit one another during the festive season. A maximum number of 20 people are allowed to do so at a time.
“I would like to encourage everyone to reduce outdoor activities and to maintain wearing masks and practice social distancing,” he said.
Malaysia is currently in the 4th place out of 150 countries in a study gauging the people’s satisfaction with their respective government’s handling of the Covid-19 outbreak.
The Ministry of Health has identified 54 new cases bringing total number of active cases in the country to 1,552.
With 4,929 recovered cases, recovery rate is at 74.8 percent.
One death have also been reported. Total deaths from the virus outbreak is currently at 108.
Total number of cases in the country is at 6,589 cases currently.
The e-Dagang EXPO (eDX), hosted by the Malaysia Digital Economy Corporation (MDEC), with support from the Ministry of Communications and Multimedia Malaysia (KKMM) attracted over 50,000 micro-entrepreneurs and small and medium entrepreneurs (MSMEs).
YB Dato’ Saifuddin Abdullah, Minister of Communications and Multimedia Malaysia (KKMM) said, “As the country prepares to restart the economy, MSMEs that have participated in the eDX can immediately tap into available digital technologies to extend their reach into lucrative markets, enable cashless transactions, enhance online marketing capabilities and strengthen their supply chain. eDX has been a strategic and timely enabler to Malaysia’s post-Covid-19 economic recovery, facilitating the continued growth of MSMEs for the long-term as they take their offline operations online and adapt to this new norm.”
KKMM through MDDEC has assured they will continue to enable businesses to capitalise on the national e-commerce growth that is likely to see a 20 percent contribution this year.
Market progression is expected to hit RM 47 billion in 2025.
“With the Southeast Asian e-commerce market looking to be worth at least US$102 billion (MYR44 bil) by 2025, SME digitalisation, upskilling and preparedness will be all the more necessary to ensure our entreprenuers and SMEs have a keen competitive advantage. By transitioning to the online marketplace, eDX participants will now be more agile in responding to market trends, consumer behaviours and trade regulations. Further to that, they can also widen their reach to new customers and suppliers within existing and up-and-coming markets to diversify income streams,” said Surina Shukri, chief executive officer, MDEC.
”As the ecosystem continues to expand, MSMEs will benefit from the support and infrastructure available. This will ensure they can easily conduct business online and take the necessary steps to implement strategies that are relevant to their needs,” she added.
Webinars hosted across the eDX forum saw leading e-commerce partners including Shopee, OURSHOP.com by AirAsia, Lazada, Carousell, BliBli and eBay take center stage.
The online expo ran from May 4 until May 8.
The Business Events Council Malaysia (BECM) has appealed to the Malaysian Government to make a clear distinction between business events and mass gatherings with a view to establishing a restart date for this crucial economic sector.
Currently, under the Conditional Movement Control Order (CMCO) conferences and exhibitions are prohibited from taking place.
The Chairman of BECM, Alan Pryor, said it was important that the Government understood that the business events industry can operate safely under comprehensive Standard Operating Procedures (SOPs).
“Malaysia’s business events venues and facilities can offer controlled environments combined with high quality operational standards to ensure the health and safety of people, which has always been and will continue to be, a primary concern of the business events industry. As such, the sector should not be subject to the mass gathering restrictions that apply to other large-scale events such as weddings, religious gatherings, sports events and concerts,” he said.
“Event venues are economic engines for their cities and communities, creating significant tax and travel revenues as well as jobs. That is why, in consultation with the industry, we have developed highly comprehensive SOPs, which demonstrate our focus on ensuring the safety of our employees, clients, suppliers and attendees. Collectively industry stakeholders have submitted these SOPs to the Malaysia Convention & Exhibition Bureau (MyCEB), who have in turn submitted them to Government,” Pryor commented.
“We hope that these will demonstrate proactivity from our industry in working with relevant Government authorities to facilitate the reopening of the business events industry sector, which plays a vital role in stimulating Malaysia’s economy.”
According to BECM, the comprehensive SOPs, which have been developed by relevant industry sectors with the support of industry associations, incorporate the use of personal protective equipment (PPE), food safety measures, air quality control, surface cleaning, and physical and social distancing.
He further stresses that Malaysian business event venues will also be required to implement a variety of other measures including temperature checks, thermal cameras, hand sanitisers, reduced touchpoints, contactless transactions and daily monitoring systems.
“As an industry we are able to run extremely well organised events tracing every one of our attendees, speakers and exhibitors as well as monitoring, tracking and putting in place a range of measures that can ensure these events comply with Government guidelines on hygiene and physical distancing. This level of capability clearly distinguishes the business events industry from mass gatherings where controls and personal space are often limited,” BCEM said.
He concluded, “We do hope that the Malaysian Government takes this distinction into account moving forward, as has been happening in other international markets such as China and Germany. Purpose-built convention centres are required to maintain international standards with controlled environments and stringent operational processes. As such is encouraging to see that some Governments have recognised this and are applying appropriate regulations so that business events can resume with the necessary precautions in place.
According to recent reports, Germany’s Government has agreed that exhibitions, trade fairs and congresses, are now on the list of activities that are listed as possible and can potentially resume under strict health and safety controlled conditions, rather than being classed as mass gatherings, which currently remain prohibited in Germany until the end of August.
By Dr Mohd Afzanizam Abdul Rashid.
What was in the news this week? Yes, the Malaysian central bank cut the overnight policy rate (OPR) by 50 basis points to 2.00 percent. This is an all-time low since 2009, the year when the country was plagued with the Global Financial Crisis, no thanks to the reckless US sub-prime mortgage lending which saw the number of foreclosurs gone up to the roof. Not to mentioned the toxic assets that was associated with the pool of sub-prime mortgages that being held by the financial institutions globally.
From the borrowers’ point of view, it’s music to their ears as the monthly installment could be reduced for those who take up the financing contract with variable rates.
But beyond that, what is it that really matters whenever OPR was brought down?
Obviously, its the fixed income instrument, also known as bonds or sukuk for Islamic bonds. This instrument will enjoy the most during the declining trend in the general level of interest rates. Why is it so?
Its simply because there is an inverse relationship between the interest rates and the bond prices. Confused already? Trust me, I have been asked the same questions by an experience banker back in the day when I was a rookie economist.
He asked why does bond prices move in different direction with yields. There are a few ways to explain this. The most classic example is to resort to the discounted cash flows whereby a decline in the discount rate would result in higher value of the instrument and vice versa.
I found that such explanation is too mechanical and may not do justice to the layman who are seriously considering to invest in the fixed income instrument. By memorising the negative relationship does help to craft your investment strategy. But one could do better than just memorising.
So bear with me for a moment.
Consider a hypothetical bonds that has a yield of 4 percent with a 10 year maturity and currently selling at RM100. Then come next year, similar bonds with the same maturity has a yield of 3 percent. Assuming we do not know the price for the new bonds for ease of referrence. So is it fair that the previous bonds that has 4 percent yield last year should be selling at the same price with the newly issued bonds that has a yield of 3 percent?
Definitely not. The older bonds has a higher yield compared to the new one.
Therefore, it should command higher prices since it can offer higher returns. The same is also true if interest rates is on the rise.
Let us use the same example of the 4 percent bond yield with a price of RM100. Assuming there is a new bond with a yield of 5 percent. Should the older bonds be selling at RM100? Certainly not. There is a new bond giving us a 5 percent yield and therefore, the price of the older bonds should be lower than the original price of RM100.
Perhaps, RM90 would do. With this in mind, prospective bond investors should roughly have an idea about their potential gains and losses whenever the general level of interest rate moves.
The prevailing economic conditions have been supportive to bonds as central banks across the globe have been aggressively cutting down their benchmark interest rates. Its like a chain reaction whenever the central banks announced their decision on interest rates. The rate for other types of interest bearing assets would follow suit.
The main reasons for such decision is none other than to provide support to the economy by making the borrowing costs become so much cheaper. Lower financing rates would stimulate the economic activities as businesses and consumers would be able to access these loanable funds more easily as the liquidity in the banking system become abundant. That is the standard script for explaining the expansionary monetary policies.
At the moment, investing in bonds does make sense as interest rates is going to stay low for a while and perhaps, could go even lower if the global economy continues to struggle to stage a recovery.
The economic stimulus has been massive but the government and the central banks appears to be ready to do what ever it takes to revive the economy. That would mean bond prices would go higher if benchmark rates would be reduced.
In fact, you could be hearing fixed income fund managers clamouring for extending the portfolio duration. This is another concept that could be addressed in another forum. Suffice to say, the longer the portfolio duration, the higher the upside potential for the bond prices and therefore, more gains.
Like the old saying, do not put all your eggs in one basket and all good things must come to an end.
In that respect, a smart investors should continue to diversify its assets as the interest rates would, at some point in the future, have to be raised when the economy starts to pick up its pace.
Central banks would have to unwind their support and would resort to a more restrictive monetary policies. When that happens, interest rate will begin to increase and bond prices would fall. For now, let the good times roll for bonds.
Dr Mohd Afzanizam Abdul Rashid is the Chief Economist of Bank Islam Malaysia Berhad
Employees of the Securities Commission Malaysia (SC) and its affiliates has donated RM120,000 from their own personal funds to lend their assistance for much-need ventilators, medical equipment and aid for frontline workers as well as vulnerable communities affected by the Covid-19 pandemic.
1. MERCY Malaysia’s Covid-19 Relief Fund to provide 600 sets of Personal Protective Equipment (PPE) to Hospital Besar Kota Bharu, Hospital Teluk Intan and Hospital Ipoh, as well as essentials to over 150 families from vulnerable communities in Kelantan;
2. University of Malaya Medical Centre (UMMC) for the purchase of two ventilators to treat patients with respiratory conditions; and
3. PDRM (Ibu Pejabat Kontijen Kuala Lumpur) to supply face masks, mineral water and snacks for over 1,000 police officers enforcing the Movement Control Order.
“Today, we are facing humanitarian, economic and financial challenges all at the same time, a re-defining event by any measure, stretching our capacity and resources as never before. Thus, I am proud that my colleagues have chosen to offer their personal
financial contributions for such a noble cause,” Syed Zaid Albar, Chairman of the SC said, in expressing the SC’s gratitude to Malaysia’s frontliners.
“However, the greater and more urgent battle at this moment is against the pandemic, led by the frontliners who work tirelessly and
under immense daily pressure to keep Malaysians safe. We applaud their commitment and salute their dedication to the cause,” Syed Zaid added.
AIA Malaysia today announced three special offers which are aimed to help cushion the ill effects of Covid-19 whilst ensuring Malaysians continue to be adequately protected during this challenging time.
The special offers and a summary of their benefits are:
Premium/Contribution waiver for first three months
50 percent additional death coverage for Covid-19 for free
Free additional Covid-19 coverage period extended
Heng Zee Wang, chief marketing officer of AIA Bhd, said,“The Covid-19 pandemic has unfortunately caused many individuals and families to face financial constraints. However, we at AIA believe that having adequate protection should not come with a huge sacrifice because now more than ever, insurance and takaful protection have become a necessity and much-needed safety net for ourselves and our families.”
Hong Leong Bank (“HLB” or the “Bank”) has enhanced and simplified the application and approval process for SME loans so that they can fast track the Bank Negara Malaysia (“BNM”) Special Relief Facility (“SRF”) fundin order to ensure that SMEs receive the necessary financial relief in a timely manner,
The move comes to help SMEs with cash flow challenges as they readjust their operations during the MCO period to ensure that they could continue to meet their financial obligations, including retaining staff on their payroll.
As of April 30, HLB had approved approximately RM1.3 billion of facilities under the BNM SRF for over 1,600 SMEs spanning across sectors ranging from wholesale and retail trade, manufacturing, construction to transport, storage and communication.
Terrence Teoh, head of SME Banking at HLB said providing flexibility on the application process has made a significant difference in easing the burden and anxiety of customers.
“We made it simpler and seamless for the customers, where they are able to apply via email and complete the process through digital consent acceptance. This not only played closely to our digital at the core strategy, but just as importantly, allowed us to help clients at a critical time during the Movement Control Order (“MCO”), where physical restrictions inhibit the traditional way of doing things,” he added.
Domenic Fuda, group managing director and chief executive officer of HLB said, “SMEs which makes up of 98.5% of all business establishments in Malaysia have been hit badly during the MCO. As a bank with a strong entrepreneurship heritage, we understand that cash flow is their biggest challenge, and they presently face financial pressures to keep their businesses afloat and protect the livelihood of their owners and employees.”
Fuda also highlights the bank’s engagement with their customers throughout the MCO period to help where they can, including extending credit where appropriate and payment deferment where necessary to assist with their short-term cash flow management.
“We are also helping SMEs digitising their banking so as they are able to operate under restricted movement and hence quickly bounce back as soon as the situation improves,” Fuda said.
HLB is also extending assistance to individuals and SME customers in the industry wide loan deferment program which was introduced on April 1 for a period of 6 months. Together, these initiatives have delivered timely support at a critical juncture during this pandemic to thousands of SMEs so that they can continue operating.
In a joint statement issued by Petronas and the Sarawak State Government, both parties have reached an agreement to the management of the state’s oil and gas assets as well as the sales tax on petroleum products.
Petronas has also retracted its appeal against the Sarawak High Court’s decision in regards to the judicial review request dated March 13. It has also agreed to pay in full the petroleum product sales tax imposed by Sarawak for the year 2019.
The sales tax amounted to RM 2 billion which is 5 percent of the products sales value.
The state has also dropped all claims in the civil case it had against Petronas the payment of petroleum products sales tax.
Sarawak has also announced it would gradually decrease the 5 percent sales tax rate imposed on the oil firm. This comes after the state had imposed a 5 percent tax on the Petronas’ petroleum product.
Petronas in return had refused to pay the tax, citing reasons that the imposed tax was unconstitutional, resulting in a state government’s legal action against the company.
While the ongoing tussle has reached an amicable agreement, all agreements between the Sarawak government and Petronas under the Petroleum Development Act 1974 are still valid and in force.
“Petronas will work closely with the Sarawak State Government to continuously development the oil and gas industry in the state,” Petronas said in a statement.
The oil and gas company has also stated that the engagement between both parties will see a more active participation by the State in the investment opportunities in the industry, based on commercial terms.
The Ministry of Health has identified 68 new cases bringing total number of active cases in the country to 1,564.
With 4,864 recovered cases, recovery rate is at 74.43 percent.
Zero death have also been reported. Total deaths from the virus outbreak is currently at 107.
Total number of cases in the country is at 6,535 cases currently.
E-commerce and industrial buying in Asia: Digital deliverance or dilemma?
Industrial buyers are increasingly adopting online platforms for procurement, either buying directly from manufacturers or online marketplaces. According to research from UPS into B2B commerce in Asia, almost 30 percent of industrial purchases are now made on e-commerce platforms. With digital platforms being an inseparable part of our daily lives, including business purchasing, is there still a role for human interaction in the buying process? Here are the three things Malaysian businesses need to know from UPS’s research.
By Lim Tze Hsien, Managing Director of UPS Malaysia and Singapore
“Understanding your customer” is one of the fundamental tenets of good business, and fortunately for business to consumer (B2C) companies, there is a wealth of information out there in the form of consumer reports and studies that delve into the minds of shoppers. But what about business to business (B2B) sellers? B2B trade is an important foundation in Malaysia’s economy, arguably more so than B2C – in 2018, Malaysian B2B e-commerce transactions registered at RM213.1 billion, 22 times more than B2C transactions at RM9.5 billion[1].
The B2B buying process is markedly different from B2C, involving multiple layers and decision makers. It is partly because of these market complexities and the need to plug the knowledge gap for businesses to better understand the B2B market that we commissioned the UPS Industrial Buying Dynamics Study.
The study draws insights from nearly 3,000 industrial purchasers globally, including 600 from Asia Pacific’s big three: China, Japan and Thailand. These markets represent differing sides of Asia’s industrial makeup, but they are some of Malaysia’s most important trade links, making up three of Malaysia’s top five major trading partners in 2018.
The report found that Asia’s B2B buyers in these markets are different, in many ways, from their counterparts in Europe and America—particularly in their response to megatrends like technology adoption and globalisation.
The big takeaway, however, was this: there is a fundamental emphasis in Asia on the continued reliance on human interactions in a world where e-commerce is increasing, automation is more integrated in industrial processes, and AI is shaking up the workforce. In order for businesses to attract and retain customers from key Asian economies, understanding this balance between technological progress in this era of growing digitalisation and the more traditional elements of customer service is vital.
It is tempting to view the rise of e-commerce as a sign that person-to-person interactions are no longer preferred when it comes to trade. After all, initial findings from our study indicate that online purchase methods like marketplaces and direct-from-manufacturer sales have stolen as much as an eight percent market share, in the case of Japan, from traditional vendors like distributors. Don’t go reaching for that mouse too fast – while respondents in Asia indicated that they intend to make more industrial purchases online in the next five years, they were also more likely to emphasis the importance of interpersonal relationships that their counterparts in the US and Europe—in particular, establishing a supplier-buyer connection prior to making a purchase online. Asian buyers are also more likely to want to speak over the phone with their suppliers than their counterparts in other regions.
What this means for Malaysian suppliers, is that as they are building their online presence, they also need to ensure that the “human side” of their business is not diminished.
A well-integrated approach to e-commerce can be key in winning over customers—for instance, in China, 22 percent of the survey respondents said they would be likely to shift to a different supplier with a website that delivers a consistent experience on a smartphone, tablet, and desktop. At the same time, however, having a well-resourced sales team is vital, and where possible, they should be plugged into the e-commerce process, such as having live chat options at various touch points during online sales and encouraging follow-up calls with online buyers.
Industrial buyers in the Asian markets surveyed place greater emphasis on post-sales support, more so than those in other regions.
This includes services such as general returns, pick-up services for difficult-to-ship products, and the provision of ready-made packaging and shipping materials for returns. Particularly noteworthy is the importance placed on on-site maintenance and repair in the region, especially from Chinese and Japanese buyers, something which is likely the result of Asia’s position as a manufacturing powerhouse.
For example, if a piece of machinery you use on your production line breaks down, the ability to have it back up and running quickly can mean the difference between a minor blip if quickly remedied by post-sales servicing, versus a major disruption to revenue and worse still, irreparable damage to customer relationships when replacement parts need to be ordered online and shipped.
This again highlights the importance that Asian buyers place in ensuring human input at all points along the sales process; the process does not simply end once the product has been delivered to the buyer.
While buyers in most markets are open to sourcing from international sellers (except for Japan, where 90 percent of B2B purchases are made domestically), the majority of purchasing still occurs within borders.
There are clear reasons for this, and these offer a roadmap for businesses that want to make more international sales. Our study found that buyers have various anxieties about purchasing from suppliers overseas, including longer transit times, customs delays, issues with returns, lack of shipment visibility, variety in quality, and issues with payment methods.
Shipping factors make up the bulk of the concerns about international purchasing—and yet these are all issues which can be easily solved by an experienced logistics partner that can offer reduced transit times (often with regional delivery times that are just as quick as domestic delivery), real-time tracking and visibility services, and streamlined customs processes. It is no silver bullet to attracting international clients, but by making these changes to their approach to shipping, Malaysian companies can increase the likelihood that these buyers will seriously consider their offerings.
The human side of B2B
Reports of the death of human interactions as a result of technological revolutions may have been greatly exaggerated; even in a field as complex as industrial supply, this just simply isn’t the case. In fact, it may well be because B2B transactions are complicated that buyers seek the nuanced communications and reassurances that can really only come from working with another human being. A country like Malaysia that is already well versed in the exporting of industrial products has potential to make even more headway by implementing relatively minor adjustments to balance the convenience and innovation of advanced technologies with highly valued human touch points.
Software, no matter how smart, is hard pressed to replace the impact and rapport of interpersonal relations. So while business owners continue to adopt technology that improve the purchase process and overall customer journey, bear in mind the often overlooked impact of the human touch.
Making relatively minor adjustments along these three areas above might be the key to attracting customers, and retaining them for the long haul—no matter where technology takes us in the next few years.
[1] Department of Statistics Malaysia