ID :
79498
Fri, 09/11/2009 - 18:20
Auther :
Shortlink :
https://oananews.org//node/79498
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CLSA: NAJIBNOMICS, THE WAY FORWARD FOR MALAYSIA
By Yong Soo Heong
KUALA LUMPUR, Sept 11 (Bernama) -- CLSA Asia-Pacific Markets, an independent
brokerage and investment group headquartered in Hong Kong, has described
Malaysian Prime Minister Najib Razak's current positive economic and social
reforms as "Najibnomics", given his economics background.
With his background on industrial economics from the University of
Nottingham, CLSA said Najib had been quick to effect various fiscal, government
and structural reforms.
They include liberalising the New Economic Policy, ensuring greater
transparency, speeding up the award of government infrastructure projects and
improving ties with Singapore to draw more foreign direct investments into
Iskandar Malaysia, a development region in southern state of Johor twice the
size of Singapore.
In its special strategy report on Malaysia, CLSA said Najib had covered good
ground since taking office on April 3 this year with a number of positive
policies and actions aimed at stimulating the local economy, attracting foreign
investments and foreign talent, reducing bureaucracy, tackling crime and
corruption, effecting greater accountability and promoting national unity
(through the 1Malaysia concept).
"Although he has until March 2013 to call for the next general election, we
believe he has little choice but to work quickly as the clock is fast ticking.
Najib not only has to implement new policies to reform the government and turn
around the economy simultaneously, he has to deliver some decent results to
ensure that the ruling Barisan Nasional coalition performs better than in the
last general election in March 2008," it said.
On the economic front, CLSA said that it expected the Malaysian economy to
recover in 2010 while consumer sentiment was also improving.
In view of Malaysia's high savings rate at 43.3 per cent of the GDP which
would support private consumption while the impact of weak imports from Western
countries would not be too severe, it pointed to an economic recovery next
year.
Malaysia's 2009 GDP has been forecast to decline by 4.0 to 5.0 per cent this
year compared to a growth of 4.5 per cent last year.
CLSA's expectations are in line with that of Bank Negara Malaysia which
indicated that the country's growth outlook for the second half of 2009 is
expected to improve after the economy contracted at a slower rate of 3.9 per
cent in the second quarter of 2009 following a 6.2 per cent contraction in the
Q1 2009.
The central bank said there were increasing signs that conditions in the
global economy were stabilising as the pace of the decline in economic activity
was moderating in advanced countries.
CLSA said that its recent contact with Malaysian companies revealed that
most were cautiously optimistic and were coping fairly well with the economic
downturn.
"There has not been any high-profile debt default while non-performing loans
in the banking system remain benign. Companies have merely been hit by shrinking
revenues, thinning margins and higher receivables, while corporate governance
issues have been sporadic.
"Most companies believe that the worst is over. Having said that, they do
think the way forward will remain challenging as unemployment continues to creep
up," CLSA said.
The investment group also conducted a survey among 300 respondents, with two
thirds of them from Kuala Lumpur, and ascertained that Malaysians were coping
well with the downturn, with only 22 per cent of the respondents saying that
their employment had been affected.
In terms of household income, 44 per cent said they experienced a decline in
income while 10 per cent experienced an increase.
About 70 per cent said they had changed their spending patterns, reducing
expenditure on food, clothing as well as leisure. Essentials like mortgages,
utilities, transport, children's education, healthcare and communications had
been largely unaffected by the downturn.
CLSA said these simple surveys and feedback from companies and consumers
seemed to tie in with the findings of the Malaysian Institute of Economic
Research (MIER).
-- BERNAMA
KUALA LUMPUR, Sept 11 (Bernama) -- CLSA Asia-Pacific Markets, an independent
brokerage and investment group headquartered in Hong Kong, has described
Malaysian Prime Minister Najib Razak's current positive economic and social
reforms as "Najibnomics", given his economics background.
With his background on industrial economics from the University of
Nottingham, CLSA said Najib had been quick to effect various fiscal, government
and structural reforms.
They include liberalising the New Economic Policy, ensuring greater
transparency, speeding up the award of government infrastructure projects and
improving ties with Singapore to draw more foreign direct investments into
Iskandar Malaysia, a development region in southern state of Johor twice the
size of Singapore.
In its special strategy report on Malaysia, CLSA said Najib had covered good
ground since taking office on April 3 this year with a number of positive
policies and actions aimed at stimulating the local economy, attracting foreign
investments and foreign talent, reducing bureaucracy, tackling crime and
corruption, effecting greater accountability and promoting national unity
(through the 1Malaysia concept).
"Although he has until March 2013 to call for the next general election, we
believe he has little choice but to work quickly as the clock is fast ticking.
Najib not only has to implement new policies to reform the government and turn
around the economy simultaneously, he has to deliver some decent results to
ensure that the ruling Barisan Nasional coalition performs better than in the
last general election in March 2008," it said.
On the economic front, CLSA said that it expected the Malaysian economy to
recover in 2010 while consumer sentiment was also improving.
In view of Malaysia's high savings rate at 43.3 per cent of the GDP which
would support private consumption while the impact of weak imports from Western
countries would not be too severe, it pointed to an economic recovery next
year.
Malaysia's 2009 GDP has been forecast to decline by 4.0 to 5.0 per cent this
year compared to a growth of 4.5 per cent last year.
CLSA's expectations are in line with that of Bank Negara Malaysia which
indicated that the country's growth outlook for the second half of 2009 is
expected to improve after the economy contracted at a slower rate of 3.9 per
cent in the second quarter of 2009 following a 6.2 per cent contraction in the
Q1 2009.
The central bank said there were increasing signs that conditions in the
global economy were stabilising as the pace of the decline in economic activity
was moderating in advanced countries.
CLSA said that its recent contact with Malaysian companies revealed that
most were cautiously optimistic and were coping fairly well with the economic
downturn.
"There has not been any high-profile debt default while non-performing loans
in the banking system remain benign. Companies have merely been hit by shrinking
revenues, thinning margins and higher receivables, while corporate governance
issues have been sporadic.
"Most companies believe that the worst is over. Having said that, they do
think the way forward will remain challenging as unemployment continues to creep
up," CLSA said.
The investment group also conducted a survey among 300 respondents, with two
thirds of them from Kuala Lumpur, and ascertained that Malaysians were coping
well with the downturn, with only 22 per cent of the respondents saying that
their employment had been affected.
In terms of household income, 44 per cent said they experienced a decline in
income while 10 per cent experienced an increase.
About 70 per cent said they had changed their spending patterns, reducing
expenditure on food, clothing as well as leisure. Essentials like mortgages,
utilities, transport, children's education, healthcare and communications had
been largely unaffected by the downturn.
CLSA said these simple surveys and feedback from companies and consumers
seemed to tie in with the findings of the Malaysian Institute of Economic
Research (MIER).
-- BERNAMA
