| ANNUAL REPORT 2015
34
CHAIRMAN’S
STATEMENT
ECONOMIC REVIEW
The Malaysian economy grew by 4.9%
in the second quarter of 2015 (Q1
2015 : 5.6%), despite uncertainties
in the external environment. Growth
was supported by steady domestic
economic
activity,
particularly
consumption spending by both private
and public sectors.
Domestic
demand
continued
to
expand during the second quarter
of 2015, albeit at a moderate pace.
Aggregate domestic demand increased
by 4.6% (Q1 2015 : 7.9%) underpinned
by steady consumption spending.
Private consumption was supported
by a favourable labour market and
accommodative financing conditions.
Private consumptionmoderated to 6.4%
(Q1 2015 : 8.8%) as households adjusted
to the GST. Public consumption grew by
6.8% attributed to higher Government
spending on supplies and services.
The services sector expanded, albeit at
a slower pace of 5% during the second
quarter of 2015 (Q1 2015: 6.4%). The
moderation was partly due to pre-GST
spending during the preceding quarter.
The final services group has increased
by 5.5% (Q1 2015: 7.8%) mainly
supported by wholesale and retail trade.
The wholesale and retail trade subsector
increased by 5.9% (Q1 2015: 9.8%),
the wholesale segment recorded the
highest growth at 8.7% (Q1 2015 : 9.6%)
and the retail trade segment expanded
by 4% (Q1 2015 : 10.7%).
Headline inflation, as measured by the
annual change in the Consumer Price
Index (CPI), rose to 2.2% in the second
quarter of 2015 (Q1 2015: 0.7%). This was
largely attributed to the price increases
of food and non-alcoholic beverage
as well as housing, water, electricity,
gas and other fuels groups. During the
quarter, the implementation of the GST
also partly contributed to the total CPI
increase.
Retailers in Malaysia have been facing
tough times in the last couple of years.
In 2014, retail numbers grew a mere
3.4% despite the fact that the gross
domestic product expanded the fastest
in 4 years to 6%. With implementation
of GST on 1 April 2015, the sales have
dipped. According to Retail Group
Malaysia (RGM), which tabulates retail
growth numbers on behalf of Malaysia
Retailers Association, has to revise
downward again for the retail sales of
this year. It expects retail sales to grow
just 3.1%, and this already taken the GST
component into account. The recent
numbers released by RGM show that
retail growth in second quarter of 2015
contracted 11.9% with the supermarket
and hypermarket subsector posting
negative growth. The subsector posted
1.9% and 1% growth in the third and
fourth quarter of 2014 respectively
before improving to 5.1% in first quarter
of 2015 due to pre-GST shopping.
OPERATIONAL REVIEW
Retail segment is our Group’s main
contributor. Our leatherwear and
other products are sourced from local
factories and contract manufacturers
or OEM factory domestically, China
or ASEAN countries. Our investment
property segment are mainly owning
commercial properties for rental income
andmainly are rented to our own related
companies in the Group.
The Malaysian economy grew by
4.9%
in the second quarter of 2015
(Q1 2015 : 5.6%)
On behalf of the Board of Directors, I am pleased to
present the Annual Report and Audited Financial
Statement of Bonia Corporation Berhad (“Bonia”)
and its Group of Companies for the financial year
ended 30 June 2015.
