Lack of prosperity in 2022

Key events to watch that will dictate market direction will be the Federal Reserve’s tapering move between now and mid-2022, a potential hike in United States interest rates by between 25-50bps next year, and the persistently high inflation rate.

THE recently ended third quarter (Q3) earnings season has now provided investors a glimpse of what is to come in 2022 as the relatively respectable quarterly results has now been overshadowed by a barrage of downgrades in earnings forecast for next year, mainly due to the one-off effect from Cukai Makmur or Prosperity Tax, which was announced in Budget 2022.

As we are well aware, on a seasonally-adjusted basis, Malaysia entered into a technical recession in Q3 as the economy contracted by 3.6% on a quarter-on-quarter (q-o-q) basis, having registered a contraction of 1.9% q-o-q in the preceding quarter.