In addressing Covid-19 impact, budget will be complemented by other initiatives, including Penjana, Prihatin Rakyat

by SHAHEERA AZNAM SHAH/ pic by BERNAMA

THE 2021 national budget to be tabled in November will focus on four main themes, namely caring for the people, steering the economy, sustainable living and enhancing public service delivery, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz (picture) said.

“All of the aspects are centred on creating a better government,” he said at the Invest Malaysia 2020 Virtual Series 1 in Kuala Lumpur yesterday.

On the plan to steer the economy, Tengku Zafrul said one of the government’s goals is ensuring growth in national GDP next year, as well as increasing foreign direct investment into the country.

“An equally important area is enhancing the usage of technology and digitalisation across various public and private sectors to spur economic growth,” he said.

“The lockdown in March and April this year effectively accelerated the adoption of technology across the board, whether by individuals, small and medium enterprises (SMEs) or corporates.”

In addressing the Covid-19 impact, Budget 2021 will be complemented by other initiatives, including the short-term National Economic Recovery Plan (Penjana) and the Prihatin Rakyat economic stimulus package previously rolled out by the government.

Through Penjana, the government has allocated close to RM1 billion to encourage technological and digital adoption by SMEs, as well as to further assist digital innovation by start-ups.

“From the capital markets’ perspective, Bursa Malaysia Bhd and the Securities Commission Malaysia have pushed digital technology to enable more costefficient online trading and investment platforms.

“It is encouraging to see both retail and institutional investors embracing digitalisation and taking advantage of a more seamless and cost-efficient means of equity trading,” Tengku Zafrul said.

In the first quarter of this year (1Q20), 74% of retail investors’ average daily trading value was transacted online. Online trading across all investors rose to 41% from 31% in 1Q19.

There was also a 96% year-on-year increase in Central Depository System account openings in 1Q20, Tengku Zafrul said.

“Moreover, out of the 50,000 new accounts opened as at end-April, almost half were youths,” he added.

The government will also facilitate greater diversity in intermediary models in the securities market, such as algorithmic trading platforms and digital-only brokers, among others.

For the improvement of sustainable living, the minister said the pandemic has not slowed down the momentum of sustainable investing, while more companies in the US have begun to embrace the environmental, social and governance (ESG) practices.

“Over a five-year performance period, the FTSE4Good US 100 Index has outperformed the US Large Cap with 80% cumulative returns relative to approximately 65% for the latter.

“Similarly, for Malaysia, in May, our benchmark index for ESG-focused companies, the FTSE4Good Bursa Malaysia Index, outperformed the FTSE Bursa Malaysia KLCI (FBM KLCI) with one-month returns of 5.3% relative to 4.8% for the latter,” he said.

The dividend yield for the FTSE4Good Bursa Malaysia Index was also higher at 4%, relative to 3.8% for the FBM KLCI and 3.7% for the FBM Emas Index.