Research

Siti `Aisyah Baharudin · Hayyan Nassar Waked · Mohd Shah Paimen ·Jurnal Ekonomi Malaysia ·2021 ·JEL: A1, D1, E7

This research attempts to analyze households’ responses to Movement Control Orders (MCO) and assess the impact of MCO on consumer confidence based on the potential disproportionate impact on various income groups in Malaysia. Households’ responses and consumer confidence are measured through an online survey to collect the targeted groups’ financial situation and household information and expectations during MCO. A total of 660 respondents from all over Malaysia were involved in this study. Analysis of the MCO responses showed that households were able to comply with MCO rules with the highest positive response of 99.7%. In comparison, the households’ responses to the implementation of MCO showed the highest negative response of 18.4%, with the majority represented by the B40 income category (65.2%). The consumer confidence present index is operating at six times higher than the expectation index, which indicates that the implementation of MCO in the short-run has a moderate impact on households’ economic status than in the long-run involving the COVID-19 pandemic effect on the overall economy. According to the people’s confidence to the government in the long-run, current political developments are essential to influence the people’s confidence in the economy. The consumer confidence index gives an overview of two policies that need to be emphasized by the government. Based on the short-run status of food consumption, this study strongly recommends that the policymakers consider establishing a National Food Stockpile in light of the nation’s food security and moving on to food-based agriculture that considers the targeted groups in the long-run.

Muzafar Shah Habibullah · Mohd Yusof Saari · Badariah Haji Din · Sugiharso Safuan · Chakrin Utit ·Jurnal Ekonomi Malaysia ·2021 ·JEL: H30, I18, J64

In this empirical note, we examine the relationship between the loss of employment and lockdown measures undertaken by the Malaysian government during the Covid-19 pandemic outbreak over the period from 25 January 2020 to 10 September 2020. By using cointegration analysis, our results suggest that there are both long-run and short-run relationships between loss of employment and lockdown measures in Malaysia. Lockdown measures show positive impact on the number of workers who lost their jobs during the pandemic. The loss of employment increases by 0.35% to 1.1% for every 1% increase in the lockdown measures.

Muhamad Rias K V Zainuddin · Md Shafiin Shukor · Muhamad Solehuddin Zulkifli · Amirul Hamza Abdullah ·Jurnal Ekonomi Malaysia ·2021 ·JEL: F10, F14

The recent pandemic outbreak has distorted international trade flows as the global economic activity reaches a nearstandstill due to stricter movement control imposed by most countries worldwide. Despite gaining the researcher’s attention, the impact of Covid-19 on trade performances are still relatively understudied. Hence, this study aims to analyse the impact of the Covid-19 pandemic outbreak on the bilateral sectoral export for Malaysia. This study employs Poisson Pseudo Maximum Likelihood (PPML) regressions to analyse the sectoral impact in gravity models. The findings provide new perspectives on the varying impacts of the current pandemic outbreak on sectoral trade performances. The dummy variables that represent the existence of Covid-19 have significantly reduced bilateral exports for 11 sectors while increased the exports for seven sectors. Meanwhile, the severity of the Covid-19 outbreak (measured by the number of new cases and death cases) in Malaysia has negative impacts on 14 sectors. The reason for this is that when the current pandemic outbreak in Malaysia is more severe, the government has to enforce stricter movement controls that affect productions and reduce exports. On the other hand, the severity of the Covid-19 outbreak in trading partners has positive impacts on the export for 13 sectors in Malaysia. This is because the more severe pandemic outbreak in trading nations causes lower production capacities and thus higher dependence on imported goods. Differences between the impact of Covid-19 existence and severity by sectors should serve as a red flag for Malaysia’s policymakers to take immediate actions to minimise the impact of the ongoing pandemic outbreak and maximise gains from sectors that have higher demand post Covid-19. The net negative impact on the export performance further reiterates the need for government intervention policies to ensure domestic firms can withstand the current tide, which then minimises the social and economic impacts and helps the economy to recover.

Kelvin Lee Yong Ming · Mohamad Jais ·Jurnal Ekonomi Malaysia ·2021 ·JEL: G17, G23, I20

The COVID-19 outbreak significantly impacted the Malaysian stock market. To some extent, the Movement Control Order (MCO) implemented in the country affected the financial performance of listed companies. In consequence investors were quite uncertain of future movements of the stock market. Effective analysis techniques are thus required to study the market movements. Investors shall rely on signals emitted by technical indicators for their investment decisions making. The aim of this study is to examine the performance of the MA rules in Malaysian stock market during the different stages of the MCO. The sample used comprised 30 largest market capitalization stocks listed in the stock market. The period of study spanned 2 January 2020 to 30 August 2020. More than 50% of the buy signals emitted by (5,60,0.01) were found linked with positive returns in the next trading day during the MCO and CMCO subperiod respectively. Conversely, 41.28% and 34.78% of the sell signals emitted by (5,50,0.01) during the respective MCO and CMCO sub-period were linked with negative returns. Among all the MA rules, (5,60,0.01) generated the highest average return of 0.88% during the MCO and CMCO sub-period. Importantly, MA rules, (5,60,0.01) also generated positive returns during the out-of-sample period. The findings of this study shall contribute to the existing literature related to technical analysis. Besides that, the findings will benefit investors the most, inducing them to generate returns or avoid losses during the critical COVID-19 pandemic period. Investors are recommended to take the signals emitted by MA rules as alternative reference for their investments. Lastly, the relevant organizations should conduct more seminars to inform and enhance analytical skill of their clients, particularly retail investors.

Ali Albada · Nurhuda Nizar ·International Journal of Economics and Management ·2022 ·JEL: G1, G4

COVID-19 is a highly contagious viral infection that has changed the world, with many human lives being lost. This study aimed to analyse investors' sentiment and stock market behaviour in Malaysia during the COVID-19 pandemic. Stock market performance was measured through the FTSE BURSA 100 Index (T100) from January 29, 2020, until March 31, 2021, by employing principal component analysis (PCA) to construct the investors' Sentiment Index (SMI). The results indicated that the sudden outbreak of COVID-19 and its rapid spread significantly impacted investors' psychology, which disrupted investors' investment decisions. Furthermore, rapid increases in confirmed COVID-19 cases and deaths increased the uncertainty and unpredictability of the country's economic situation. As a result, the Malaysian financial market showed a steep downward trend during the COVID-19 pandemic.

Chia-Guan Keh · Yan-Teng Tan ·Jurnal Ekonomi Malaysia ·2021 ·JEL: G10, G12, G18, H51, I18, O40

The exponential spread of the coronavirus in Malaysia has caused a significant majority of the economic activities to cease, resulting in poor stock market performance. This pandemic situation has in turn prompted the government to introduce policies to restart and improve economic activity and stock market performance. Hence, does the government’s interference in attempting to control the outbreak of COVID-19 disease, play an important part in affecting the level of economic activity and stock market performance? To resolve this doubt, the impact of government policy responses to COVID-19 in the case of Malaysia was investigated. The sample period of the study was from 28 January 2020 till 29 May 2020, amounting to a total of 84 observations. The findings reveal that the responses taken by the government, such as staying at home requirements, closure of workplaces and debt or contract relief for households, significantly affected both economic activity and stock market performance in the country. Based on the results, these responses appear to have significant policy implications, particularly in displaying that debt or contract relief for households have negative impacts on the economic activities, but a positive impact on the stock market.

Muhammad Safuan Abdul Latip · Farhana Tahmida Newaz · Rachel Yong Yuen May · Ahmad Esa Abdul Rahman ·Journal of Asian Finance, Economics and Business ·2021 ·JEL: Q56, M39, D16, Q01, M59

The study investigated the effect of food safety knowledge, food safety trust and the factors influencing organic food purchase intention in the ‘new normal’ of the COVID-19 pandemic. The study employed non-contrived and cross-sectional methods. The data was collected in Malaysia using convenience sampling. A total of 330 valid questionnaires were analyzed using Structural Equation Modelling (SEM) and PROCESS for hypothesis testing. The study revealed a significant relationship involving food safety knowledge on personal attitude, perceived social pressure, and perceived autonomy. Moreover, organic food purchase intention was found to be influenced by personal attitude, perceived social pressure, and perceived autonomy. Interestingly, trust in organic food safety moderated the relationship between perceived autonomy and organic food purchase intention. The study proved valuable for stakeholders and organic food producers to understand the ‘new normal’ COVID-19 market scenario for a sound understanding of the market and the sustainability of the organic food industry. A new research framework is proposed and validated, related to individual purchase decision in global health issues which is limited in current literature. Hence, the study contributed to a better comprehension of green consumerism mainly in the Asian market.

Farhad Taghizadeh-Hesary · Han-Phoumin · Ehsan Rasoulinezhad ·Economic Analysis and Policy ·2022 ·JEL: H81, G21

The main objective of this paper is to identify the determining factors of the optimal credit guarantee ratio in four members of the Association of Southeast Asian Nations (ASEAN), namely Indonesia, Singapore, the Philippines, and Malaysia, by employing statistical techniques and the Vector Autoregressive (VAR) approach. The empirical findings prove that the loan default ratio is the optimal credit guarantee ratio’s main determining factor. The empirical findings confirm that the credit guarantee ratio needs to be increased in the ASEAN region to help SMEs survive in the wake of the COVID-19 pandemic and for the post-COVID-19 economic recovery. The results show that the credit guarantee ratio should vary for different countries based on the macroeconomic climate and for each bank or, in other words, for groups of banks with similar financial soundness. The practical policy recommendations are establishing a regional credit guarantee scheme (RCGS) and evaluating banks’ soundness for setting the optimal credit guarantee ratio.

Basem Ertim · Tamat Sarmidi · Norlin Khalid · Mohd Helmi Ali ·Asian Economics Letters ·2022

In an attempt to mitigate the effects of COVID-19, the Malaysian government imposed the Movement Control Order (MCO). To address the adverse impacts of the MCO policy, the Malaysian government initiated a series of recovery plans for both fiscal and monetary measures. This study aims to assess the government’s various policy measures on Malaysia’s leading macroeconomic indicators. Regardless of the differences in the gross domestic product (GDP) components, the real impacts on GDP growth are almost identical between Malaysia and a control group. This result is partly explained by the increase in total and domestic investment and private consumption.

Chia Lin Chang · Yu-Hui Wang · Kuo-I-Chang ·Emerging Markets Finance and Trade ·2022 ·JEL: F14, F10, F61

This study performs survival analysis to evaluate duration of revived and new machinery import and the hazard ratios (HRs) of covariates related to the global financial crisis (GFC) and COVID-19 pandemic in the Association of Southeast Asian Nations (ASEAN). The results indicate that large tariff margins decreased the possibility of disruption (HR: 0.8024) to Japanese import from ASEAN countries after revived during the COVID-19 pandemic and increased the possibility of disruption (HR: 1.0338) to Chinese import from ASEAN countries of new import during the GFC.

Sulistiyo K. Ardiyono ·Economic Analysis and Policy ·2022 ·JEL: D22, L2, L6, L8

Numerous studies have explored the impact of the Covid-19 pandemic on firms’ financial performance, but the link between such performance and employment has rarely been estimated rigorously. Using the ASEAN-5 firms’ data from Q1-2018 to Q3-2021, this study shows how the pandemic affects firms’ revenue, cost, profitability, and employment heterogeneously across countries. It is argued that while revenue losses are the main challenge, widespread and prolonged restrictions in some countries have created extra complications in idle inventories and labour. In response to the revenue shocks, firms reduce their employment with an elasticity of around 0.10, indicating that a 10 per cent revenue decline is associated with a 1 per cent headcount reduction in the short run. A further examination using event analyses reveals that the path of labour adjustment is diverse across countries and industries, reflecting the degree of pandemic severity and countries’ structural issues.