A year of political and economic instability, to rebound in 2023?

THE past year has been challenging for Malaysia amid the political instability and rising inflation.

However, the uncertain gloomy conditions turned for the better with the appointment of Datuk Seri Anwar Ibrahim as the country's 10th prime minister.

As soon as Anwar assumed office, the ringgit rebounded to RM4.4 to the dollar and Bursa Malaysia turned around into bullish territory.

Will this positive sentiment sustain in 2023?

Will the Anwar administration change things for the better or will the rakyat continue to feel the economic pinch?

Will rising cost of living continue to squeeze the rakyat?

Top of the agenda is definitely the still rising cost of living.

The Anwar administration must needless to say, tackle this problem if it wants to win the hearts of the rakyat.


 

Will oil prices continue to be volatile?

The Russia-Ukraine war is still not over and it takes just a flash point to boost oil prices.

On the corporate front, if oil prices surge more than US$100 per barrel, companies such as Petronas Dagangan, Hibiscus Petroleum, Icon Offshore and other oil and gas firms are set to benefit once again.

Pandemic still not over

As observed last week, prices of rubber glove stocks made a mini comeback when cases returned in China.

So do not discount the virus just yet and write off manufacturers such as Top Glove Corp, Supermax Corp and Hartalega.

A new major shareholder for Public Bank

Malaysia's third largest bank can expect a new substantial shareholder following the demise of it's founder Tan Sri Teh Hong Piow.

Nobody really knows who will inherit Teh's shares but they will probably go to his family member.

It will be interesting to see how the new majority owner will steer the bank in 2023.

Syed Mokhtar taking DRB-HICOM private?

Just a few weeks ago, reclusive tycoon Tan Sri Syed Mokhtar Al-Bukhary was told by Anwar to liberalise Padiberas Nasional Berhad or Bernas to break the monopoly.

Ever since then, speculation is rife that the tycoon is making his move to take his concerns private to ward off external interference.

Will Syed Mokhtar protect his interests? In the meantime, DRB's shares continue to gain.

Chicken stocks continues to cluck

It looks like the chicken and eggs shortage enveloping the country in 2022 is set to protract into 2023.

For as long as the chicken quagmire is not solved, companies such as QL Resources, LTK and Lay Hong will continue clucking away.

It will take a major political will to solve the situation rather than tell the rakyat to "eat less chicken."

Bank Negara Malaysia set to raise interest rates again?

Rumours are rife that Bank Negara Malaysia is expected to raise interests for the fifth time next month.

This is to curtail still rising inflation and bring down rising cost of living.

If this happens, it will be bad news again for homeowners as they need to pay higher loans.

Government subsidy to surpass RM80 billion?

All eyes will also be on the government's soaring subsidies for the rakyat.

Now that oil prices are hovering at US$80 per barrel, the government is expected to fork out some RM100 billion worth of subsidies next year, higher than RM80 billion this year.

What will Anwar do to address this situation?

Semiconductor industry to face shortage

The global semiconductor sector faced a worldwide shortage last year as more and electric cars, smartphones and tablets are rolled out.

Expect this microchips shortage to continue and this will benefit companies such as DagangNex Berhad and Genetec Berhad.

US economy to remain volatile, China lockdown to continue?

Everybody knows that whenever the US sneezes or coughs, economies around the will feel its ripples reverberating all around the world.

Thus, Malaysia's economic performance next year pretty much hinges on how US President Joe Biden manages the US economy.

Similarly, China continues to grapple with its zero COVID-19 policy.

Until the US and China, which are the world's top two economies respectively get their economic power house in order, Malaysia and other countries in the region will very much be held ransom by their economic spurts or woes.

Economists expect a choppy 2023?

Although the World Bank and International Monetary Fund have painted a choppy and gloomy 2023 with the world economy headed for a recession, economists say it will not be that bad for Malaysia.

Both Professor Dr Geoffrey Williams and Associate Professor Dr Ahmed Razman Abdul Latiff expect Malaysia to register a gross domestic product of 4-5 percent.

Speaking to DagangNews, Williams said inflation would have tapered off by next year.

"High commodities prices and robust electrical and electronics products will drive Malaysia's growth next year," Razman told DagangNews.

As for Malaysians, continue to spend money by going to the movies and eat out because a strong domestic economy will cushion economic shocks from all over the world. – DagangNews.com