Movement Control Order Extension and COVID-19 Update
Following the Malaysian government’s announcement yesterday that the Movement Control Order (MCO) will be extended by two weeks until April 14, the Ministry of Transport released a statement today announcing that all essential and non-essential goods in Port Klang, Port of Penang, and Johor Port will be cleared to warehouses outside port areas over the weekend to ensure that the import of essential goods will not be congested during the MCO. The Royal Malaysian Police will ensure that that all vehicles of freight forwarders and haulers will be allowed to travel to their respective destinations uninterrupted. Export activities will continue as usual.
Elaborating on the MCO extension, the Ministry of Healthy has clarified that companies involved in hospital support, health, and pharmacies will remain categorized as essential industries and their business operations will not be disrupted. All selected vendors and suppliers in these sectors are required to provide full cooperation during the extension and are reminded to follow all requisite health procedures at all times during their work in health facilities. In a statement today, Defence Minister Datuk Seri Ismail Sabri Yaakob noted that stricter regulations will be implemented during the MCO’s second phase as the National Security Council (NSC) has been asked to produce a new phase-two standard operating procedure. Ismail Sabri clarified that the NSC will present the more stringent procedure on March 28.
In a sign of how movement control policy may develop in the coming weeks, Ismail Sabri also announced that from March 27 until April 9, Kampung Dato’ Ibrahim Majid and Bandar Baharu Dato’ Ibrahim Majid in Simpang Renggam, Kluang, Johor will be under an enhanced movement control order (EMCO) given the relatively high spread of COVID-19 cases in the region. Under the EMCO, 3,570 locals from 650 families will not be permitted to leave the house. All business activities will be halted and the Community Welfare Department will provide basic food for 14 days. The army and police will be deployed to ensure compliance to the order.
On March 24, Bank Negara Malaysia (BNM) announced a new slew of RM100 billion in comprehensive financial relief measures amid the outbreak’s economic fallout. The initiative includes a six-month postponement of all individual and business loans for small and medium enterprises (SMEs), the choice to convert existing credit card to personal loans, and restructuring of corporate debt. Bursa Malaysia Securities Bhd has also temporarily relaxed margin financing rules from March 27 to September 30 to address forced selling pressure impacting investors, especially with margin accounts. For example, the mandatory liquidation requirement should a client’s margin account of a Participating Organization’s (PO) fall below 130% of the outstanding balance has been removed, and investors may provide other types of collateral for margin financing as needed.