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Sunday, February 21, 2016

Malaysia Weekly Highlights


This is becoming a habit as Malaysia's Deputy Prime Minister suddenly announced a suspension on the recruitment of migrant workers from all countries, including Bangladesh. 

1.5 million Bangladeshi? As of now, hiring is freeze on all foreign workers
Deputy Prime Minister, Ahmad Zahid was reportedly saying, "The government has made the decision to freeze the intake of all foreign workers, including those from Bangladesh. And we appeal to all employers to hire locals."

The government's announcement was a rather strange one given that it was not long after the news that 1.5 million Bangladeshi workers would be recruited and brought into the country. The sudden change of plan is a strange one indeed but not something new. At best, the flip-flop is likely due to politicians bowing to public pressures. At worst, it shows that our policymakers did not know what they were doing. 

Human Resource Minister Datuk Seri Richard Riot did say that not all 1.5 millions were for Malaysia.


Zeti: Bank Negara will always be independent
Outgoing Bank Negara Malaysia (BNM) Governor Tan Sri Zeti Akhtar Aziz said today the central bank has always been independent and gave an assurance it will remain so after her departure amid investors jitters over its succession plan scheduled to be announced soon.

Zeti also said that no politician should be appointed to succeed her but maintained that none has sat on the board of any financial institutions as well as the central bank.

Zeti’s retirement this April has caused jitters within the financial market as investors raise concerns over possible political interference in the central bank’s succession plan, which could put its independence at stake.

There were also questions about policy continuity and the competence of Zeti’s replacement.

The BNM chief had said recently that the bank had identified a capable successor but appointment power ultimately lies with the federal Cabinet.

Zeti was tightlipped when asked about her successor today but insisted that BNM would remain in good hands.

Zeti also dismissed speculation that she would stay on. There had been talks about strong requests for her to stay but the BNM chief said it was “highly unlikely”.

The daughter of celebrated economist Regius Professor Ungku Aziz Ungku Abdul Hamid, Zeti was handed the reins of the central bank at the peak of the Asian financial crisis in 1998.

She was appointed governor in May 2000, becoming the first woman to head Malaysia’s central bank.


Malaysia's gross domestic products grew 4.5% in the fourth quarter of 2015, the slowest since 3QFY2013, bringing the growth for the whole year to be at 5%. The economy grew 6% in 2014. 

The growth in the latest quarter (4Q2015) was supported by private sector demand.

Bank Negara Malaysia said that th Malaysian economy is expected to face a challenging operating environment in the immediate future and growth will continue to be driven by domestic demand, with some support from net export.

The pace of the domestic demand growth is expected to moderate while the growth in income and employment continues to support consumption. The moderation is expected as households continue to adjust to the higher cost of living.

1MDB vs WSJ  

1Malaysia Development Bhd (1MDB) has said that it never channelled any funds into Datuk Seri Najib Razak's bank accounts. This was in response to Wall Street Journal (WSJ) finance editor's claim that a RM2.6 billion "political donation"  was not from the Saudi Royal family but companies related to the state-owned investment firm.

PM Najib in the news again
 1MDB called editor Ken Brown's latest claim a "lie". 

1MDB said it had never transferred funds to Najib's account and has been stated by the authorities. 

In a Feb 19 statement, 1MDB said, "Contrary to The Wall Street Journal's baseless and unproven allegations, 1MDB has consistently maintained that it has not paid any funds to the personal account of the prime minister. This has been reiterated by multiple lawful authorities, including the Malaysian Anti-Corruption Commission, attorney-general and various reputable international publications, who have confirmed that these funds came from Saudi Arabia."

Brown said WSJ has evidence that the money found in Najib's accounts were from companies and bank accounts "related" to 1MDB in an interview with Australia's ABC News. 


The Employees Provident Fund (EPF) has declared a dividend rate of 6.40% for 2015 with a total payout of RM38.24bil.

EPF declares 6.4% dividend

The increase was in tandem with the growth in EPF investment assets, which stood at RM684.53bil as at Dec 31, 2015.

In a statement, the EPF said it recorded RM44.23bil in gross income for the last financial year, an increase of 13.18% over the RM39.08bil figure in 2014.

EPF chairman Tan Sri Samsudin Osman said the gross investment income achieved was due to its diversification strategy across multiple asset classes in various countries and markets.

Samsudin described the 6.4% dividend rate as a "commendable performance" given the prevailing challenges.

He said more importantly, the EPF was able to meet its two strategic investment targets of at least 2.5% nominal dividend on a yearly basis as required by the EPF Act 1991 and at least 2% real dividend on a rolling three-year basis.

Commenting on the economic climate, Samsudin cautioned that this year would be more challenging.

Samsudin said the volatility in the currency markets would make it difficult for the EPF to repeat the outperformance in global assets recorded last year.

"Nevertheless, we will continue to preserve and further enhance the value of capital from members' contribution by maintaining stable and consistent returns over the long term within tolerable risk limits," he said.

Last year's dividend can be viewed via EPF's Facebook page at "Kumpulan Wang Simpanan Pekerja", Twitter at KWSPBuzz and on YouTube at KWSP Malaysia.

The latest EPF account statement is available online via i-Akaun at myEPF website (

Alternatively, members can obtain their statement via EPF kiosks or visit any EPF branches. 

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