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The recently concluded second quarter of 2018 (2Q18) revealed many interesting impetus of growth in Corporate Malaysia, specifically since the period saw a change in government in the first time. As policies are adjusted, consumer sentiments shift, and businesses adjust for changes, how are sectors reflecting these changes? BizHive Weekly takes a look at what to expect for the second half of the year:
By our latest estimate, growth for 2018 is likely to be around five per cent, lower than our earlier projection. At this new range, growth remains firm and Malaysia continues to be one of the fastest growing economies in the region. Going forward, the growth momentum will be supported by the following factors: first, sustained global growth and trade momentum will support trade activities; second, private sector spending is expected to benefit from continued positive spillovers from external demand, recent indicators also point towards an improvement in business and consumer sentiments and thirdly, household spending will be supported by favourable labour market conditions and additional spending from the tax holiday.
Datuk Nor Shamsiah Mohd Yunus, Bank Negara Malaysia governor
Talking about sectors, we still like the banking sector. I think the banking will still remain the engine of growth for the economy and also for the corporate earnings as well. Banking this year may see around eight to 10 per cent earnings growth, so they are still doing well. At this point in time, we would advise investors to look at blue chips, index-linked counters, because these are the counters that have been sold down quite badly after the 14th General Election.
Kenny Yee, Rakuten Trade Sdn Bhd head of research
Thee just-concluded 2Q18 reporting season still showed some signs of weakness. We further cut our FBM KLCI FY18E-FY19E earnings growth to 4.3 per cent-3.5 per cent from 5.1 per cent-5.4 per cent previously. As such, our end-2018 index target is lowered to 1,870 from 1,900 previously.