President of the Federation of Public Listed Companies Tan Sri Megat Najmuddin Khas is very worried about the severe impact from the Covid-19 fallout.
PETALING JAYA: The immediate outlook for companies is bleak and a number of companies in affected industries would take a hit from the ongoing Covid-19 pandemic, says the president of the Federation of Public Listed Companies Tan Sri Megat Najmuddin Khas.
“The whole world is undergoing a lot of pain and stress at the moment and more so for businesses, corporations and public listed companies. Just about everyone is feeling the pinch and things will not be the same any more after this. It is possible that going forward we have to change, ” Megat Najmuddin told StarBiz.
He said he isn’t too optimistic on how this will pan out and expects that almost all public listed companies will have to tighten their belts.
“All public listed companies should tighten their belts and this may cost people their jobs. These are tough times and tough measures have to be taken. I’m worried about social security; people’s income and income levels and the economy as a whole. The total economy will take a hit because oil prices are down and gas is also down a bit, ” he said.
Megat Najmuddin said the biggest hit will be the hospitality, tourism and restaurant industries.
“They are closing one by one and this is not just unique to Malaysia. It’s the same all over the world. I think it’s game over for them already. We need a new way forward to think out of the box to get over this obstacle, ” he said.
Megat Najmuddin said he hopes the government will continue to boost the economy and more importantly to boost confidence which is at an all time low.
“The government should see that the corporate sector must perk up as well. While I believe the property market will take a hit and this is a huge percentage of the economy, ” he said.
“The question is where are people going to find the money to buy cars and houses? While for the banks, who are they going to lend to? Banks are to feel the pinch also eventually, ” he added.
He also said corporations will have to reduce their salary expense moving forward if the demand for their products and services won’t be the same as before.
“There will be less travel and so less petroleum will be used moving forward as more people stay at home, ” he said.
Megat Najmuddin said that will be a rise in the number of people who are poor and lacking in food as incomes would dry up especially in the rural areas.
“Save for those who are working in the civil service, which would still receive their income, the rest would be affected, ” he said.
Bernama reported on Sunday that TAN CHONG MOTOR HOLDINGS BHD (TCMH) and Berjaya Corp Bhd have decided to implement austerity measures to protect the future well-being of the companies.
Both of these companies are directly exposed to the consumer sentiment, for big ticket items such as the automotive industry.
TCMH’s independent directors have offered to reduce their fees with immediate effect during its current zero revenue period, while senior management employees will also be taking salary cuts of up to 30%.
Their non-senior management employees will also undergo salary cuts of up to 15% based on their total monthly basic salary plus monthly fixed allowance, according to their grade levels.
Tan Chong group president Datuk Tan Heng Chew said the group will review the measure periodically until the situation returns to normal, and additional measures might be announced to sustain the business if the situation is prolonged or worsen.
Tan said although government assistance has been given to small and medium-sized enterprises and some industries, the group, however, have not been able to leverage any of the assistance or support.
https://www.thestar.com.my/business/business-news/2020/04/28/bleak-outlook-for-many-companies
