Malaysia
GDP growth slipped to lowest of 3.6% since 2010 and BNM governor opine that there's ample space for a rate cut to support the economy. While agriculture sector contracted by 5.7%, mining sector including oil & gas saw a steeper decline of 2.5% versus 4.5% in the previous quarter. Headline inflation is 1% which is moderate compared to 1.3% in 3Q19 as impact from SST comes into 3Q19. BNM will release its GDP forecast on March 25 2020, alongside with another monetary policy meeting at early march. Ringgit as a whole in 2019 has appreciated 1.1% against the greenback and the currency will continue to be influenced by external headwinds in 2020.
Hit by further rate cut speculations, banking stocks continue to plummet further as it couldn't succumb the heavy selling pressure from the investors. Slower GDP growth accompanied by a potential rate cut will remain a main concern for banking sectors as their future continue to look gloom before the global economy gets any better. The only life-saving straw seems to be the economic stimulus package which is expected to lift up investor's declining appetite. "Assuming there are two rate cuts this year, earnings will decline by 4-6% on average for the overall sector", said analyst.
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