In today’s edition of Evening 5 — PM Datuk Seri Anwar Ibrahim said in Parliament that raising the OPR is not only solution to ringgit depreciation, ahead of Bank Negara’s last meeting for the year. Meanwhile, MYAirline says it is in “advanced” talks with investors.
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00:04 Raising the overnight policy rate is not the only solution for addressing the depreciation of the ringgit,
00:09 according to Prime Minister Datuk Sri Anwar Ibrahim.
00:12 Diverging from the approaches taken by countries such as Turkey and Argentina
00:16 that raise their benchmark interest rates to stabilize their devalued currencies,
00:21 Anwar pointed out that Malaysia's economic indicators such as inflation and unemployment rates
00:26 are still relatively low, while the economy and investments are steadily growing.
00:31 In Parliament, various MPs had questions about the state of the ringgit,
00:34 which has now slipped to some 4.76 to the USD, to a near 25-year low.
00:40 Anwar, who is also the Finance Minister, reiterated the government's medium and
00:44 long-term plan to strengthen the ringgit, including increasing trade in the local currency,
00:50 a strategy known as de-dollarization.
00:52 Anwar said the transition to local currencies in trade has shown promising progress,
00:57 with 25% of total trade with China conducted in ringgit and RMB.
01:02 Meanwhile, panellists at the RAM Forum 2023 said that raising the OPR
01:07 is not an effective tool in strengthening the ringgit.
01:10 Maybank IB Head of Fixed Income Research, Winson Foon,
01:13 explained raising the OPR might not yield the desired outcome,
01:17 especially when the US continues to tighten its monetary policy.
01:21 Bank Muammarlat Malaysia Chief Economist Dr Muhammad Afzal Nizam Abdul Rashid is also against
01:27 the idea of increasing the OPR as it could potentially lead to adverse economic consequences.
01:33 Instead, he suggested looking into strengthening policies
01:36 as an approach to shore up the weakening ringgit.
01:39 The last time Bank Negara raised the OPR was in May,
01:42 instituting a 25-basis point hike to 3% from 2.75%.
01:46 The central bank will hold its last Monetary Policy Committee meeting for this year
01:51 on November 1st and 2nd.
01:53 Bursa Malaysia's net profit for the third quarter rose 20.5% year-on-year to $60.4 million
02:04 on the back of improved trading revenue from the securities market.
02:08 Revenue improved 13% year-on-year to $158.7 million from $140.4 million previously,
02:15 mainly due to a 26% rise in securities market trading revenue to $70.4 million.
02:21 The rise in this segment's trading revenue was due to the securities market's higher
02:25 average daily trade value on market trades and direct business trades,
02:29 which increased by 28% to $2.24 billion from $1.75 billion previously.
02:36 Going into the final quarter of 2023,
02:38 Bursa said it is optimistic about meeting its announced headline KPIs for the financial year,
02:44 including PBT of between $295 million and $326 million,
02:49 as well as year-on-year non-trading revenue growth of 5% to 7%.
02:53 The market operator also pointed out that while the initial public offering market capitalization
02:58 KPI has already been achieved, the exchange is expected to register 31 IPOs for the full year
03:05 against the target of 39 IPOs, mainly attributable by lower lead market listings.
03:10 As companies are assessing the lead market transfer framework before making decisions
03:15 on their listings. Breaking down the IPOs, there are seven for main market,
03:19 23 for ace market and one for lead market.
03:22 Troubled My Airlines says it is currently in advanced negotiations with two potential
03:32 investors out of more than 15 proposals received as they aim to finalize a recapitalization package
03:38 that will help to resurrect their operations, which have been suspended for over two weeks
03:43 since October 12th. In an update statement, the airline said that its team is
03:48 "working around the clock" to finalize a recapitalization package, which would also
03:52 facilitate the reimbursement of monies to affected passengers, as well as payment of salary and
03:58 statutory dues. With reference to the show-cause notices issued by the Civil Aviation Authority
04:03 Malaysia and the Malaysian Aviation Commission, My Airlines said that it has formally responded
04:08 to these two agencies last week within the deadlines. On the matter of refunds, the airline
04:14 said it has received over 30,000 calls and emails which are being attended to by its customer care
04:20 team. My Airlines reiterated that it has not terminated or placed any staff on unpaid leave
04:25 since October 12th. It said that besides setting up an internal tabong isan to collect donations
04:31 from within My Airline for employees most adversely affected, My Airline has also made
04:36 arrangements with Perkeso for its employees to apply for the employee insurance scheme
04:41 to ease their financial burden during this period. My Airline is currently racing to
04:46 final white night ahead of a November 14th deadline, which is the expiry of its air
04:51 service license, to shore up its capital and avoid a shutdown.
05:00 CIMB Group Holdings and Japanese finance company J Trust are among firms vying to buy Indonesia's
05:06 PT Bank Commonwealth in a deal that could value the lender at 400 million US dollars
05:12 to 500 million US dollars, said two sources with knowledge of the matter, according to Reuters.
05:17 Bank Commonwealth, which is 99% owned by Australia's biggest lender, Commonwealth Bank
05:22 of Australia, focuses on retail lending as well as corporate banking services for small and medium
05:28 enterprises. Morgan Stanley, the financial advisor on the sale, has asked bidders to submit binding
05:34 offers by early November, the sources added, declining to be identified as the planned sale
05:39 had not been publicly disclosed. CIMB and J Trust have expressed interest and are looking at
05:44 submitting binding bids, the sources said. It is worth noting that both companies have banking
05:49 units in Indonesia. The lender, which also provides wealth management services, had total
05:55 assets of IDR 18.39 trillion last year, according to its annual report. It logged a loss of more
06:01 than IDR 350.8 billion in 2022, more than double a year earlier, the report said,
06:08 citing challenges posed by the COVID-19 pandemic.
06:11 MISC has backed a contract to supply, operate and maintain a liquefied natural gas floating
06:21 storage unit in Pengerang Johor with an estimated contract value of up to USD 213.7 million or
06:28 IDR 1.02 billion. The group said it has entered into a binding heads of agreement with Pengerang
06:34 LNG 2, a 65% owned unit of Petronas Gas, to supply, operate and maintain the FSU. According
06:41 to MISC, it will convert one of its Puteri 1-class LNG carriers, namely Puteri Delima 1, which
06:47 completed her long-term charter in early 2023 and is currently in layup into the FSU for the
06:54 above-mentioned provision. The agreement is valid for a period of 20 years from the expected
06:59 operation date of 2025 and may be extended for a period to be agreed between the parties.
07:04 MISC currently operates two FSUs as well as six floating production, storage and
07:09 offloading vessels and five other floating storage and offloading vessels.
07:13 [Music]