This article first appeared in The Edge Malaysia Weekly on January 22, 2024 - January 28, 2024

There is a host of economic data coming out this week, kicking off with Malaysia’s Consumer Price Index (CPI) data for December 2023 on Monday. On the same day, Bank Negara Malaysia will publish its latest international reserves as at Jan 15, 2024. Foreign exchange reserves amounted to US$113.5 billion (RM527.60 billion) as at Dec 29, 2023.

Malaysia’s headline inflation eased further in November to 1.5% year on year (October: 1.8% y-o-y), the slowest pace since February 2021, amid lower price increases recorded for food, health, restaurants and hotels. Economists expect inflation to be slightly higher going into 2024, aligning closely with the forecasts outlined by the government of 2.1% to 3.6%.

On Wednesday, at its first meeting for 2024, Bank Negara’s monetary policy committee will decide whether to raise or leave its benchmark interest rate unchanged at 3%. In a Jan 15 note, Maybank Investment Bank expects the central bank to keep the overnight policy rate (OPR) at 3% throughout 2024, providing respite from the higher financing costs witnessed in 2023. At its last meeting of 2023, the central bank had decided to leave the OPR at 3%, making it the third pause in a row.

Meanwhile, the cabinet is expected to decide on the proposed targeted subsidy mechanism this week, according to Minister of Economy Rafizi Ramli.

The capital markets will be closed on Thursday in conjunction with Thaipusam.

In the courts, the hearing of the 1Malaysia Development Bhd-Tanore Finance Corp trial continues on Wednesday, with Malaysian Anti-Corruption Commission investigating officer Nur Aida Arifin continuing her testimony. She is the 49th prosecution witness.

Former prime minister Datuk Seri Najib Razak is charged with 25 counts of money laundering and abuse of power over alleged 1MDB funds amounting to RM2.28 billion deposited in his AmBank accounts between February 2011 and December 2014.

Across the Causeway, a highlight of the week will be the release of Singapore’s core inflation data for December 2023 on Tuesday, which is expected to stay elevated.

Elsewhere in Asia, the Philippines is set to announce its December 2023 trade balance on Friday.

South Korea’s gross domestic product (GDP) report for 4Q2023 will be released on Thursday. S&P Global Market Intelligence expects 4Q GDP to decelerate to 0.4% quarter-on-quarter (q-o-q) (seasonally adjusted) from the previous quarter’s 0.6% growth.

Apart from Malaysia, central bank meetings in Japan, the eurozone and Canada will be the highlights this week. The Bank of Japan (BoJ) will meet on Monday and Tuesday and will likely maintain its yield curve control (YCC) policy. “BoJ is expected to maintain its YCC policy and negative short-term rate policy at its January meeting. Inflation will likely slow further in January and the cautionary mood following the recent earthquake will prevail,” says ING.

In a report last Friday, S&P Global says the European Central Bank and Bank of Canada meetings on Wednesday and Thursday respectively will be economic events to watch closely after market optimism about lower rates has started to waver into the new year.

“When the ECB is likely to start lowering interest rates remains an ongoing debate for the market. While a Bloomberg consensus pointed to four 25-basis-point cuts starting June, as inflation and economic conditions moderate, signs of the inflation descent stalling in the eurozone have started to show via Purchasing Managers’ Index (PMI) prices data, hinting at uncertainties in the path ahead,” it notes.

January flash PMI data will be released for major developed economies including the US, the UK, eurozone, Japan and Australia on Wednesday. Japan is also set to unveil its trade data on Tuesday, and inflation data for January the following day, which ING expects to decelerate to 2.2% y-o-y in January with government subsidies on energy bills and a high base last year contributing as well.

In the US, a series of economic releases will be updated in the week including the 4Q GDP reading. Consensus expectations point to slower growth in 4Q2023, down from the 4.9% q-o-q figure in 3Q2023. Other noteworthy data releases include Core Personal Consumption Expenditure, personal income and spending and home sales data.

On the local corporate front, Bursa Malaysia-listed companies scheduled to hold their annual general meetings include Homeritz Corp Bhd (Monday) and Bright Packaging Industry Bhd (Wednesday), while those holding extraordinary general meetings this week include FCW Holdings Bhd (Wednesday) and Jasa Kita Bhd on Friday.

FCW’s minority shareholders will vote on its 55%-owned subsidiary Urban Reach Sdn Bhd’s proposal to acquire a parcel of leasehold industrial land in Setapak, Kuala Lumpur, from Jasa Kita for RM43.08 million cash.

Meanwhile, building support services provider KJTS Group Bhd is set to be listed on the ACE Market of Bursa Malaysia on Friday. It aims to raise about RM58.9 million based on the listing price of 27 sen per share. Its shares offered to the public have been oversubscribed by 31.28 times.

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