Malaysia: Ringgit falls to a new low



China’s central bank adjusted the yuan downwards for the second consecutive day, sending markets and currencies reeling.

The ringgit continued its fall against the US dollar, hitting a new low of RM4.0275, in the morning, largely due to the devaluation of the yuan.

All currencies in the region also continued with their decline against the US dollar.

On a year-to-date basis, the ringgit is the worst performer among its Asian peers, and is down 13.33%. This is followed by the Indonesian rupiah, South Korean won and Thai baht at 9.88%, 8.35% and 6.99%, respectively.
Comparatively, the yuan is now down approximately 4.61%.

The impact on the ringgit is worse compared to other countries because Malaysia is viewed as a net exporter of energy and prices are depressed now – hovering below the US$50 per barrel mark.

Stock markets across the region fell with the Jakarta Composite Index leading the pack by falling 3.1% followed by Hong Kong’s Hang Seng Index which dropped 2.38%. There was a “bloodbath” on Bursa Malaysia where about 90% of the 1,000-odd stocks listed closed lower.

The benchmark KLCI fell for the fifth consecutive day, shedding 26.8 points yesterday to close at 1609 points. Since last Thursday, the index has been down by 116 points.

On Tuesday, the People Bank of China (PBOC) moved the guiding rate for the yuan 2% downwards and yesterday it set it at 1.6% lower. The guiding rate is the band within which the yuan is allowed to trade.

The downward movement is viewed as a devaluation of the yuan and the biggest currency movement for the world’s second largest economy since 1994. Although China abandoned its currency peg in 2005, the central bank manages the yuan in a tight range.

The devaluation of the yuan has sparked concerns that China’s economic slowdown was more severe than anticipated and the central bank had to devalue the currency to export its way out of the situation.

/theSTAR 13-08-2015



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Malaysia: Economy grew 4.9% in Q2, 2015



Malaysia’s economic growth slowed to 4.9% in the Q2 of 2015, compared with 5.6% in the preceding quarter, as exports decelerated.

The growth rate, nevertheless, was slightly higher than market expectation of a 4.8% expansion for Malaysia’s gross domestic product (GDP) in the three months to June.

 BNM governor Tan Sri Dr Zeti Akhtar Aziz said on Thursday the economy was projected to remain resilient and on a steady growth path.

Zeti, who will remain as governor until her term ends next year, said headline inflation was higher in the second quarter, growing at 2.2%.

“Inflation is expected to be higher before moderating towards second half of 2016,” she said.

During the quarter in review, the services sector expanded 5%, supported by growth in the wholesale & retail trade and information & communication sub-sectors, while the manufacturing sector grew at a moderate pace of 4.2%, supported by electrical, electronic & optical products.

Growth of the mining & quarrying sector, which accounted for 9.1% of Malaysia’s economy, moderated to 6%, compared with 9.6% in the preceding quarter due to the decline in production of natural gas and slower production of crude oil.

Bank Negara data showed that private consumption expanded 6.4% in the second quarter of the year, compared with 8.8% in the first quarter, supported by growth in the consumption on food & beverages, housing & utilities, communication and transportation.

Gross fixed capital formation eased to 0.5%, from 7.9% in the preceding quarter due to the deceleration in machinery & equipment sector.

The central bank said the momentum of gross fixed capital formation was led by private-sector investment, grew 3.9%.

In the three months to June 2015, Malaysia’s exports contracted 3.7%, reflecting the subdued performance in the shipment of goods and services. Imports, on the other hand, fell 2.8% due to a contraction in the country’s demand for foreign goods.


Bank Negara Malaysia (BNM) said growth in the second quarter was supported by continued expansion in services and a turnaround in agricultural production.

/theSTAR 13-08-15


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Non-Traditional Model to Product Launch-Dengue Vaccines



Reproducing, in relevant parts, herewith an interesting article, lifted out from a news article, by SURESH KUMAR, Executive Vice President External Affairs of Sanofi viz:

Innovative medicines are traditionally developed and launched first for at-risk populations in the US and Europe. Later, once innovation costs have been paid for, the new medicines are then made available to endemic nations.

This model works but it has some serious limitations: namely, a delay in access to innovation in these endemic nations. There is also the risk that unmet medical needs in these countries are left neglected as they are not driving the innovation agenda of the pharmaceutical industry.

As of today, dengue remains on the World Health Organisation’s list of neglected diseases, despite the fact that it threatens half the world’s population.

Clearly, a new solution is needed – particularly for emerging markets and middle-income countries that have the capacity technical expertise, as well as disease knowledge to participate in clinical development programmes and also approve and regulate new medicines for use by their citizens.

Dengue provides a particularly well-suited case in point, since it is not a public health threat in the US and Europe but it is a major priority in endemic countries in South-East Asia and Latin America.

About 20 years ago, Sanofi set out to develop an innovative vaccine against dengue, one that would be effective in preventing the illness caused by all four dengue strains. Since then dengue has spread from a handful of countries to being endemic in over 120 worldwide and is recognised by the WHO as the fastest growing mosquito-borne disease in the world today.

The WHO has also called for a dengue vaccine to be used in conjunction with other dengue prevention efforts like vector control and education to help achieve its objectives to reduce dengue mortality by 50% and morbidity by 25% by 2020.

Sanofi set out to do both, develop and launch its dengue vaccine first in endemic countries where it could have the greatest impact on disease burden and quickly achieve these WHO objectives.

To be able to realise this “flipping the model” approach to new vaccine access, the company invested 300mil euros to build a dedicated production facility for the dengue vaccine that would eventually attain a full capacity of 100 million doses annually.

The company made this investment in 2009, at considerable risk given that the results of its Phase III clinical development programme were not yet known. Now, the Phase III programme has successfully reached its efficacy endpoints and the dengue vaccine candidate is currently under regulatory review in a number of endemic countries both in Latin America and in South-East Asia.

This is in keeping with the company’s long-standing commitment to launch the vaccine first in these nations rather than in Europe or the US, where its traditionally done.

But forging a new access model is not something that a pharmaceutical company can do on its own.

In order to be successful, Sanofi has worked hard to collaborate with endemic governments and public health bodies, as well as the global development and vaccine policy community, to build acceptance and support for this new approach.

If the dengue vaccine introduction model is to succeed, it will be necessary for Sanofi to be able to make the vaccine available, upon approval, for a fair and equitable price that balances innovation costs against sustainable access in endemic countries.

New ways of funding access to such an innovation in these countries, as well as mechanisms to help strengthen their healthcare infrastructure to be able to successfully implement the vaccine, will be needed.

Sanofi intends to work closely with governments, funding bodies and the vaccine policy universe to broker the successful introduction of the dengue vaccine upon approval. We know that more is at stake here than the launch of the world’s first dengue vaccine.

If this model succeeds, industry as a whole may be more inclined to be proactive in addressing the unmet medical needs of low and middle-income countries as a priority rather than as a second phase of medical innovation access.

Diseases like dengue disrupt economic growth and development of endemic countries and investments in controlling and eliminating this disease burden can help to further the economic stability and growth potential of these nations.

/theSTAR 08-08-2015



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CCM: Selling Medan Plant



Chemical Company of Malaysia Bhd (CCM) is keeping its options open for its facility in Medan, Indonesia. It has two options for the asset – either to sell it as a going concern or pare it down.

“There are two options. One is to sell it as a going concern, the other option is to sell the assets down. We were in discussions with a few parties, but at the same time, we are working in parallel. We are also going ahead with an asset sale, so whichever happens first,” said Group Managing Director Leonard Ariff Abdul Shatar, on the sidelines of the government-linked companies (GLC) graduation ceremony on Friday.
 
The facility has been shut down, with an impairment loss of RM36.8mil.
 
“The factory is still there, but we are now evaluating bringing some of the equipment from Medan back to some of our existing facilities here. And that would clear up the land and we would look for a buyer. But in the meantime, if any person comes in expressing interest, we are open for discussions,” said Leonard.
 
He said the company’s transformation process involved it writing off its investment in Medan last year. “We had some issues in the past and we are slowly trying to overcome that,” he said.
The company is still in the process of cleaning up a few things, and hopes to emerge stronger this year.
 
“We are on the right track. From the CCM point of view, the GLC transformation programme was very useful and we will continue with a lot of the practices that were stipulated in the programme,” he said, referring to the 10-year GLC Transformation Programme, which came to an end this year.
 
As to how it is managing with the depreciating ringgit, Leonard said the company had started hedging some of its capital purchases. He said CCM’s biggest foreign exchange exposure is in its fertiliser and pharmaceutical businesses. However, it has in the last three to four years carried out operational efficiency projects, which have “buffered” the impact.
 
On the flip side, a lot of CCM’s pharmaceutical devices as well as its fertilisers are exported in US dollars.
 
CCM reported a net profit of RM3.95mil for the first quarter ended March 31, 2015 compared with RM3.77mil in the same period previously. Revenue was lower at RM270.13mil during the quarter against RM273.77mil.

 /theSTAR 10-08-2015



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Malaysia: Ringgit fell to 17-year low



The ringgit’s exchange rate weakened to 3.91 against the USD, which is 17-year low, as the sell-off in the stock market intensified amid weakening growth prospects continuing to weigh down on investor sentiment.

A drop in the price of Brent crude oil, the benchmark for Malaysian petroleum products, back to below USD50 a barrel and falling prices of crude palm oil (CPO) to near RM2,000 a tonne added to the uncertainties.
 
The two commodities are the country’s major exports after electrical and electronic products.
 
Despite the weak ringgit, total exports declined 3.7% in the second quarter after having registered a 2.5% drop in the first quarter.
 
Analysts said weak external demand and a slowdown in domestic consumption was putting the brakes on economic growth.
 
Citi Research, a unit of Citigroup Global Markets Inc, yesterday projected Malaysia’s economic expansion may slow to 4% in the second quarter ended June 30 from the 5.6% achieved in the first quarter.
 
“With growth slowing, we also doubt Bank Negara will hike to defend the ringgit,” its economist Wei Zheng Kit said. Bank Negara kept its key overnight policy rate steady at 3.25% in July. The last interest rate hike was in July 2014.
 
The ringgit remained Asia’s worst-performing currency year-to-date, despite sharper declines by its regional counterparts over the past one month.
 
The ringgit’s 10.6% drop year-to-date has raised concerns that the currency has weakened too fast and too far. CIMB Research in a recent note predicted that it would take RM4 to buy one USD by the end of the year.
 
“There has been talk that Bank Negara is taking steps to reduce the volatility in the currency market,” said one currency dealer.
 
But the ringgit continued to face pressure amid a huge outflow of foreign funds from the stock market.
 
MIDF Research calculated that net foreign outflow so far this year had reached RM11.7bil. This adds to the RM6.9bil that had left the market last year.The pace and intensity of the sell-off by foreigners was reminiscent the country had experienced during the global financial crisis of 2008.
 
The drop in the price of crude oil “is not conducive for the ringgit and Malaysian equities,” the firm said. It was down 27% from a recent peak of USD67 a barrel in early May and about half the price compared with a year ago.
 
The Government had based its Budget 2015 assumption on the price of Brent at USD55 a barrel.
Citi Research said even if Brent stayed at USD50 a barrel, the full-year average oil price of USD54 a barrel would be close to the Budget assumption.
 
“With a continued current account surplus of 3%-3.5% of gross domestic product for 2015 as a whole, concerns over the impact of lower oil prices appear overblown,” Wei said.
 
/theSTAR 07-08-2015

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Malaysia's international reserves fell to US$96.7b



Bank Negara Malaysia’s international reserves totalled RM364.7bil (US$96.7bil) as of end-July 2015, a decline of RM14.7bil or US$3.8bil from two weeks ago.
“The reserves position is sufficient to finance 7.6 months of retained imports and is 1.1 times the short-term external debt,” the central bank said on Friday.
The reserves had fallen from the RM379.4bil (US$100.5bil) as at July 15. The reserves position as at July 15 was sufficient to finance 7.9 months of retained imports and was 1.1 times the short-term external debt.
The ringgit has weakened by nearly 12% against the US dollar year-to-date.
According to the BNM data, the international reserves had fallen from RM405.5bil (or US$116.0bil) as at Dec 31, 2014 compared with RM441.9bil (US$134.9bil) as at end-2013.

/theSTAR 07-08-2015

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NKEA: Healthcare EPP3 Report 2014



Pharmaceutical exports recorded a nine per cent growth, surpassing the targeted five per cent growth
for 2014
 
The total value of Malaysian pharmaceutical exports amounted to RM611 million against RM561
million for the year 2013.

This growth was punctuated by additional efforts from the Government and the Malaysian Organisation
of Pharmaceutical Industries (MOPI) to help home-grown pharmaceutical manufacturers penetrate overseas markets. 
 
Over the year, the Government collaborated with MOPI to conduct a major study on trade and nontrade
barriers. Among the five most important and new markets identified were Thailand, Vietnam, Turkey, 
Kazakhstan and Australia markets.

The Government had finalised the procedures on Off Take Agreements (OTA) for both Pharmaceutical
and Medical Device products that will encourage production and consumption of Made-in Malaysia health products. The OTA purchase agreements are expected to encourage MNCs and other
manufacturers to base their manufacturing here as they will be given 3year agreements (plus another
two years if they meet export criteria) as opposed to a two-year contract to supply the Government

The year also saw positive developments in the transfer of MNCs’ manufacturing operations to 
Malaysia. This was achieved by partnering foreign companies with local players. To date, 11 projects 
have been accorded EPP status under EPP 3. These are Hovid Bhd, Bicon Ltd, CCM, Kotra Pharma,
AJ Biologics, Impian Eksekutif Sdn Bhd, Servier, Ranbaxy, AFT Pharmaceuticals and Biocare. 

Additionally, AFT Pharmaceuticals, a privately owned company with operations in Australia and New 
Zealand, has agreed to partner a local manufacturer to produce orphan drugs here. This will boost the
image of local pharmaceutical manufacturers.

In a bid to expand its export markets, the Malaysian Government and MOPI commissioned a Trade 
Barrier Study in five target countries: Thailand, Vietnam, Turkey, Australia and Kazakhstan.

The objective of the study was to evaluate and prioritise the five most attractive countries for local
pharmaceutical companies to export their products to, and enable MOPI to build an extensive 
pharmaceutical market and achieve regulatory insight into the targeted countries. 
 
It also provides entry strategies with all the critical elements for the local companies for geographic 
expansion, providing Malaysian companies with the information to grow their capacities and meet the 
entry requirements.

Among the lessons learnt in boosting pharmaceutical sales and manufacturing is the time taken to
register a product. With improved coordination efforts, the registration period was cut from 18 months
to 60 working days for all EPP companies.
 
More needs to be done to ensure development of new molecules and penetration to new markets.
 
Strong support from the various Government agencies is one of the keys for the success of this EPP.

 /PEMANDU Annual Report 2014



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Organ donations: Pledge



There has been an increase of over 12,000 pledges to donate organs in 2014 compared with 2013, said National Transplant Resources Centre head (NTRC) Datin Dr Lela Yasmin Mansor.

She attributed this improvement to greater awareness among the people. Speaking to theSun, Lela said the number of pledges rose from 27,452 in 2013 to 39,882 in 2014.

"For the first half of this year we have keyed in 13,524 pledges into our systems," she added. Lela said the pledges were either in the form of organs or tissues.

In the first half of 2015, 110 people received kidney, liver and cornea transplants.

"The 110 people received their organs from 20 kidney donors, nine liver donors and 33 cornea donors," she said, noting countless others also benefited from heart valves and bone transplants.

Many individuals or their next-of-kin wanted to donate organs after death out of a sense of compassion.

"Unfortunately, in some cases, the organs were found to be incompatible with the intended recipient or infected during the donor's lifetime," said Lela, adding the need for immediate transplant meant storing certain organs for extended periods of time was not possible.

The raised awareness on organ donation can be attributed to medical professionals and NTRC's street campaign.

"Doctors are more likely to present the option of organ donation to the deceased's next-of-kin if he/she was their patient," said Lela, noting the doctor would consider it as their final duty to the patient.

Likewise 2014's street campaign saw NTRC personnel reach out to the public in both urban and rural areas in the country.

"Rather than wait for them to come to us, we went to them. Within four hours, over 5,000 pledges were raised throughout 77 locations nationwide," Lela said, expressing hope that this year's campaign would also garner a strong response.

/theSUN 02-08-2015

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