OPR hike amid high commodity prices

by AUFA MARDHIAH / pic courtesy of Affin Bank

THE world is going through a period of high commodity prices, high energy cost and high inflation which has been rectified, says Affin Bank Bhd president and group CEO Datuk Wan Razly Abdullah Wan Ali.

He was commenting on the recent Overnight Policy Rate (OPR) hike by Bank Negara Malaysia (BNM).

“The world central bank is trying to address the issue and BNM has responded but there is more to this story. We see more hikes to come and the market coming down. For the moment, there is a lot of pressure on inflation and energy cost, so we expect a few more hikes this year.

“We have had good low growth for the first quarter, with the OPR hikes we expect the low growth to taper off because it will be more expensive for borrowers. We always look for ways to optimise our net interest margin (NIM) with the biggest strategy to optimise NIM is through current account and savings account,” he said at the launch of Affin Bank’s collaboration with GAX MD Sdn Bhd (MYTHEO) today. 

Meanwhile, Wan Razly said the bank’s loaf roof target is 12% compared to 11% for the previous year.

Furthermore, on the ringgit performance, he said the local note is determined by exports, imports and business opportunities in the country.

“The inflation is very driven by high energy cost and high cost of commodities, the ringgit will normalise once the central bank has taken action to address the high inflation and to cool down the economy,” he added.

Affin Bank is collaborating with MYTHEO, an innovative robo-advisor licensed by Securities Commission Malaysia to provide algorithm-driven and automated discretionary investment portfolio management services powered by artificial intelligence (AI) technology.

In addition, the collaboration allows new and existing customers of Affin Avance, which was created for the tech-savvy and on-the-go professionals to accumulate wealth by leveraging investment algorithms that enable diversification of investments across global markets and fully automated portfolio rebalancing depending on market conditions.

Moreover, MYTHEO’s fully automated portfolio maintenance capabilities also enable tracking vast volumes of the market and economic data as well as news and reputable social media comments.

This will station the robo-advisor in a better position to maximise returns while automatically rebalancing the customer’s portfolio according to their risk and investment profile.

Other than that, MYTHEO also provides the most advanced and sophisticated robo-advisor in Malaysia which is assisted by AI and Big Data, as well as provides the widest portfolio exposure across multiple asset classes globally and has low to zero entry fee and no hidden charges.

New and existing customers of Affin Avance will get three months fee waiver of MYTHEO (subscribe from May 20 to Nov 30, 2022) and complimentary one-year Group Personal Accident coverage up to RM50,000.

Wan Razly said the partnership offers an alternative investment option to the new and existing Affin Avance customers and further enhances the bank’s financial solutions and product offering.

“Malaysia’s mass affluent category is performing exceptionally well, with an upward growth trend. There is an increasing demand for more convenient avenues to invest in. 

“Such collaboration to provide a robo-advisory service for our customers bodes well with their evolving needs, rapid technological advancement and shifting market dynamics. 

“Affin Bank aspires to be at the forefront in providing a simpler and more accessible avenue for our customers to grow their wealth with us,” he said.

Meanwhile, GAX MD CEO and MD Ronnie Tan was pleased to offer the bank the opportunity to enjoy the benefits of digital wealth management service.

“The partnership is another step in the company’s vision to help more people achieve their financial goals and enable their moments in life,” he said.

He added that in the investment point of view, in view of the challenges and the impact of inflation, MYTHEO takes into consideration inflation, income and equity growth.

“There is an automation process in MYTHEO; if we feel that inflation is going up, a certain percentage of your investment is automatically switched to an asset class (consisting of commodities) in inflation hedge.

“Due to inflation, goods and commodities are moving up. This is where good diversification comes in. Most important is that the algorithm does it for you — it manages the switching in when to buy and when to sell without any human bias and emotion from the trading process,” he added.

Affin Bank ED Community Banking Nazri Othman said the bank’s expected customer volume for MYTHEO is 10% of its current 300,000 mass affluent customer.

MYTHEO is now available for download via Apple App Store and Google Play Store. In conjunction with the launch, a minimum investment of RM100 is accepted as a special promotion.