Businesses Must Go On Despite Pandemic Say Fund Managers And Analysts

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Going on well: A supermarket in Kuala Lumpur doing brisk business with shoppers thronging the malls. -IZZRAFIQ ALIAS/The Star
KUALA LUMPUR: Fund managers and analysts have described any move to declare a state of emergency as acceptable considering the current Covid-19 situation and its impact on the economy.
“However, as long as the economy has continuity and continues to open up amid the Covid-19 pandemic, it should have little impact on businesses, ” said UOB Asset Management (Malaysia) Bhd chief executive officer Lim Suet Ling.
She said at the moment, the country needs minimal disruption to the economy and stability in the government.
In relation to this, she said that getting Budget 2021 out was crucial and should not be delayed.
“With the Covid-19 causing the global economic slowdown, the government would need to find ways to shore up the country’s economy.
“As such, the current government wouldn’t want the Budget 2021 to be delayed to ensure the country’s economic growth remains intact, ” she said.
One of the arguments for declaring a state of emergency was to allow the federal Budget to be tabled in Cabinet, instead of putting it to a vote in Parliament.
Bursa Malaysia has had a good run in the last six months, driven by glove stocks.
Lim said that there could be some profit-taking activity in the next few weeks in some sectors, given the rally in the market over the last six months.
“But it’s not because of the possible Emergency, ” she said.
Yesterday, speculation of an Emergency being declared accentuated the weak sentiments on Bursa Malaysia. The benchmark FBM KLCI closed lower at 1,490 points with losers outnumbering gainers by about three to one.
Fortress Capital CEO Thomas Yong said that at this juncture, it appears that the Emergency rule will only impact political activities.
“There should be muted economic impact unless economic fiscal policy implementation is affected, ” he said.
An analyst said that political stability and continuity for businesses to go about their affairs was the order of the day as companies struggle to keep their employees and businesses afloat amid the Covid-19 pandemic.
“Whatever the current political situation, businesses ultimately want stability and clarity when running their day-to-day operations. Any new rules should not further clamp down on operations.
“The economic engine must continue to keep its momentum to save lives and jobs, which will contribute to the overall Malaysian economy as a conducive economic environment is necessary, ” he said.
The analyst said that a state of emergency need not be a big deal, as the Thailand example has shown.
“The economy continued as normal even though they had a constitutional crisis. In fact, the baht strengthened.
“The bottom line is as long as the economy is fine then the rest will take care of itself. There will come a time to set things right and it will come, ” said the analyst.
Sunway University professor Yeah Kim Leng, however, felt that the economic climate would be dampened by the political uncertainties caused by the use of such emergency powers in the long term.
“In the immediate term it will circumvent challenges to the present administration and enable it to focus on tackling the pandemic, ” he said. - FMT

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