This article first appeared in The Edge Malaysia Weekly on February 11, 2019 - February 17, 2019

After a holiday-shortened week with barely any economic data releases locally, this week looks set to be a busy one starting with the industrial production index (IPI) and manufacturing sales value for the month of December out on Monday.

After slowing to 2.5% year on year in

November from 4.3% the month before, Bloom

berg’s survey of economists showed a median forecast of 2.8% for December. The deceleration in November was driven by slower manufacturing output in tandem with a slump in exports. Export growth slowed to 1.65% y-o-y in November from 17.7% the month before, but picked up to 4.8% in December.

In any case, the focus will likely be on the fourth quarter (4Q2018) gross domestic product numbers due out on Valentine’s Day, along with the full-year GDP growth. Economists, surveyed by Bloomberg, are expecting GDP to grow 4.5% in 4Q2018, bringing full-year growth to 4.7%.

In 3Q2018, the economy expanded by 4.4% y-o-y, slowing from 4.5% in 2Q2018 and 5.4% in 1Q2018.

To recap, the government had forecast GDP growth of 4.8% last year and 4.9% this year, supported mainly by domestic demand. The economy expanded by 5.9% in 2017.

Also in focus will be the start of the SRC International Sdn Bhd trial, in which former prime minister Datuk Seri Najib Razak has been charged with seven counts of criminal breach of trust, abuse of power and money laundering, on Tuesday. Najib has pleaded not guilty to the charges.

SRC is a former unit of 1Malaysia Development Bhd, and is now controlled by the Ministry of Finance.

Also on Monday, the Malaysian Palm Oil Board will be releasing statistics for the palm oil sector for January. A Reuters poll sees stockpiles falling 4.7% from December’s record high of 3.22 million tonnes to 3.07 million tonnes.

Planters, traders and analysts surveyed expect production to decline for the third straight month to 10.9%, from December, to 1.61 million tonnes. Exports are expected to rise 12.4% to 1.56 million tonnes, on stronger demand from Europe.

Falling stockpiles and rising exports should augur well for the price of crude palm oil which reached a low of RM2,100 per tonne last November before rebounding 9.95% to last Friday’s close of RM2,309 per tonne.

Elsewhere, US Treasury Secretary

Steven Mnuchin will be heading to Beijing for another round of trade talks with China’s vice-premier Liu He, with the intention of striking a deal before the March 1 deadline set by the White House. However, US President Donald Trump’s comment on Feb 7 that he would not meet with China President Xi Jinping before the March 1 deadline dampened sentiment and sparked a sell-off in US stocks as fears that a 25% hike in tariffs on Chinese goods could not be averted on March 2 returned.

In the US, the country is staring at another possible shutdown when the temporary funding bill expires on Friday, Feb 15, unless Congress passes another temporary bill or reaches an agreement on funding for Trump’s border wall. The Democrats had refused to support a bill to fund the building of the wall, which led to a record 35-day partial government shutdown in parts of December and January.

Bloomberg, however, reported that a deal on border security funding could be reached as early as Monday.

In the UK, Brexit continues to grab headlines. The UK parliament could be voting on a revised deal negotiated by Prime Minister Theresa May with Brussels on Feb 13, but if there is no deal, lawmakers will hold a debate on Brexit on Feb 14.

In terms of economic data, China has a busy calendar after the week-long Chinese New Year holiday. The data due out this week includes the rescheduled January foreign reserves data, January financing and monetary aggregates, January trade numbers, January consumer price index (CPI) and producer price index (PPI).

US data out this week include January CPI and PPI, December advance retail sales, November business inventories, January industrial production and the University of Michigan consumer sentiment survey.

On the corporate side back home, the reporting season will pick up steam with companies releasing numbers for the quarter ended Dec 31, 2018. Companies slated to announce their financials this week, according to Bloomberg, include MISC Bhd, Dialog Bhd, British American Tobacco (Malaysia) Bhd, Eastern & Oriental Bhd, Carlsberg Brewery Malaysia Bhd, Heineken Malaysia Bhd, Kuala Lumpur Kepong Bhd, Batu Kawan Bhd, Hartalega Bhd, Guan Chong Bhd and Sunway REIT.

Companies that are holding shareholder meetings this week include Scientex Bhd and Can-One Bhd.

Scientex’s extraordinary general meeting on Monday will see shareholders vote on its proposed acquisition of 42.41% interest in Daibochi Bhd for RM222.5 million, as well as the proposed mandatory takeover of the remaining shares and warrants in Daibochi not already owned by Scientex once the acquisition becomes unconditional.

Can-One’s extraordinary general meeting on Thursday will see shareholders decide on the proposed acquisition of 2.17 million shares or 0.49% interest in Kian Joo Can Factory Bhd by Can-One International Sdn Bhd (CISB), a wholly-owned subsidiary of Can-One from Tan Kim Seng at RM3.10 per share or RM6.71 million. Shareholders will also vote on the resultant proposed mandatory general offer for all the remaining shares in Kian Joo, not owned by CISB, after the proposed acquisition, at RM3.10 each in cash.

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