01/08/2025

BIZ & FINANCE FRIDAY | AUG 1, 2025

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IMF upgrade of outlook for M’sia reflects trade dynamics in the first half of 2025, making the IMF’s revised projection reasonable.

Pharmaniaga completes rights issue, on track to exit PN17 SHAH ALAM: Pharmaniaga Bhd yesterday successfully completed two critical milestones of its Regularisation Plan (RP), the rights issue and private placement, thus positioning the group firmly on track to exit its PN17 status. A total of 3,458,950,862 renounceable rights shares were fully subscribed, with an oversubscription rate of 26.14%, reflecting strong support and confidence from existing shareholders. Meanwhile, the private placement exercise attracted 19 new investors, involving 1,656,845,000 placement shares at a total value of RM223.7 million. Despite this new equity injection, Lembaga Tabung Angkatan Tentera (LTAT) and Boustead Holdings Bhd (BHB) remain the group’s major shareholders at an aggregate shareholding of 43.9%, each holding 8.7% and 35.2% equity stake respectively, and Pharmaniaga remains a government-linked company (GLC), with continued emphasis on national interest and the well-being of the Armed Forces. Pharmaniaga managing director, Datuk Zulkifli Jafar said: “We are encouraged by the solid support from our shareholders and new investors. “The oversubscription of our rights issue reflects deep market recognition of our business fundamentals, recovery plan and leadership.” “The group also views the participation of the 19 new institutional and reputable investors in the Private Placement exercise as a clear endorsement, that aligns with our broader objective of contributing to Malaysia’s healthcare resilience and pharmaceutical self-sufficiency, a shared national aspiration,” he added. As both fundraising exercises have been completed, the group is set to conclude the final phase of its RP, the Capital Reduction exercise which is targeted for completion by the middle of this month. This marks a major step forward in Pharmaniaga’s recovery and efforts to exit PN17 status by the first quarter of next year. “The strengthened balance sheet enables the group to reduce borrowings and scale up our operations, especially in high-impact areas such as development of human insulin, vaccines and other generic drugs. “We are currently advancing the development of Malaysia’s first locally owned insulin and vaccine production facilities. “All hands are on deck as we intensify our biopharmaceutical manufacturing initiatives, fortify our logistics and distribution with new warehouse developments, and sustain strong momentum in our Indonesia operations,” said Zulkifli. The group extends its deepest appreciation to the shareholders, regulators, financiers, business partners, employees, and customers for their steadfast support throughout this recovery process. With the RP nearing completion, the Group will now sharpen its focus on driving operational excellence, product innovation, cost optimisation, and sustainable business practices to secure long-term growth across all segments.

Firdaos Rosli projected 2025’s growth at 3.8%, slightly below Bank Negara Malaysia’s (BNM) forecast range of 4% to 4.8% and the IMF’s 4.5%. Nevertheless, he said Malaysia’s economy could still benefit from potential improvements in external conditions. “Any easing of US trade and non-tariff barriers would benefit Malaysia’s export outlook,” Firdaos said. However, he said the country’s trade performance may be constrained by weaker growth in key markets such as China and the European Union, coupled with soft demand for non-semiconductor exports in the second half of the year. Firdaos expects Malaysia’s GDP growth for the first half (1H) 2025 to be at 4.45%. “Malaysia’s growth in 2H2025 should come in around 4.5% if the IMF’s forecast is on point,” he said. On the domestic front, Firdaos said consumption is likely to remain robust, supported by benign inflation, stable labour market conditions and policy support measures. “The 25-basis-point Overnight Policy Rate (OPR) cut, civil service wage hikes, minimum wage adjustments, and income-support initiatives are all expected to strengthen demand-side activity,” he said, adding that the inflation rate is expected to stay below two per cent. The report by the IMF, titled Global Economy: Tenuous Resilience amid Persistent Uncertainty , also projected emerging markets and developing economies to grow by 4.1% in 2025 and 4.0% in 2026. – Bernama

KUALA LUMPUR: Malaysia’s official reserve assets amounted to US$120.61 billion (RM515 billion) as of end-June 2025, while other foreign currency assets stood at US$1.21 billion, according to Bank Negara Malaysia (BNM). The central bank said the detailed breakdown of international reserves provides forward-looking information on the size, composition and usability of reserves and other foreign currency assets, in accordance with the International Monetary Fund’s (IMF) Special Data Dissemination Standard (SDDS) format. It also offers guidance on the expected and potential future inflows and outflows of foreign exchange of the federal government and BNM over the next 12-month period. “Overall, the detailed breakdown of international reserves under the IMF SDDS format indicates that, as at end-June 2025, Malaysia’s international reserves remain usable,” it said in a statement yesterday. BNM stated that, for the next 12 months, the predetermined short-term outflows of foreign currency loans, securities, and deposits, which include, among others, the scheduled repayment of external borrowings by the government and maturities of foreign currency Bank Negara Interbank Bills, amount to US$12.99 billion. “The net short forward positions amounted to US$22.60 billion, reflecting the management of ringgit liquidity in the money market,” it added. In line with the practice adopted since April 2006, the data excludes projected foreign currency inflows arising from interest income and the drawdown of project loans, said BNM, adding that the projected foreign currency inflows amount to US$2.70 billion in the next 12 o Economy projected to grow 4.5% this year and 4% in 2026 KUALA LUMPUR: The International Monetary Fund’s (IMF) upward revision of Malaysia’s economic growth forecast reflects uncertainties surrounding global trade policies, particularly the United States (US) tariff impacts. In its July 2025 World Economic Outlook update, the IMF raised Malaysia’s real gross domestic product (GDP) growth projection to 4.5%, an increase of 0.4 percentage points from its April estimate. The IMF also raised its 2026 forecast by 0.2 points to 4%, citing improved prospects across developing and emerging economies. Bank Muamalat Malaysia Bhd chief economist Dr Afzanizam Abdul Rashid said the revision underscores how evolving trade dynamics continue to shape Malaysia’s economic outlook. “The revised forecast demonstrates the degree of uncertainty concerning US tariff policies. It appears that the US government is open to further discussions, which could potentially lower tariff rates,” he told Bernama. Mohd Afzanizam further said front-loading activities among US importers earlier this year may have contributed to global growth between January and July. He noted that these developments have inadvertently supported economic momentum

Meanwhile, UOB Kay Hian Wealth Advisors Sdn Bhd head of investment research Mohd Sedek Jantan said the firm expects businesses to defer capital spending pending further clarity on international trade policies. “Despite persistent uncertainty surrounding US trade tariffs and escalating geopolitical tensions, we believe the impact of trade transmission shocks on GDP will materialise with a lagged effect, typically within a 12 to 15-month horizon. “This projection assumes no external intervention. However, such passivity is unlikely given the typical endogenous policy response from both governments and corporations in mitigating adverse economic conditions,” he said, adding that the revision by the IMF aligns with the firm’s forecast in May 2025. Mohd Sedek stated that UOB’s position reflects a broader behavioural shift among companies and policymakers beginning in 2026. This shift aligns with strategic adjustment models. In this context, he believes that both firms and policymakers will implement mitigation plans and adjust their strategies to address the structural pressures resulting from increased trade tariffs. “These forward-looking adjustments are likely to shape the medium-term growth trajectory and capital allocation patterns across key sectors,” Mohd Sedek said. Separately, AmBank Group chief economist

BNM: Malaysia’s official reserve assets at US$120.6 billion end-June

The Bank Negara Malaysia building in Kuala Lumpur. – REUTERSPIC

embedded options, and no undrawn, unconditional credit lines provided by or to other central banks, international organisations, banks, and other financial institutions. “BNM also does not engage in foreign currency options vis-à-vis the ringgit,” it said. – Bernama

months. The central bank said the only contingent short-term net drain on foreign currency assets is government guarantees of foreign currency debt maturing within one year, amounting to US$419.0 million. “There are no foreign currency loans with