Briefs: Fed keeps zero-rate outlook, sees inflation bump short-lived

Federal Reserve officials continued to project near-zero interest rates at least through 2023 despite upgrading their US economic outlook and the mounting inflation worries in financial markets. The decision, which came on a volatile day for investors with Treasury yields surging ahead of the announcement, masked a growing number of officials who saw liftoff before then, though Chair Jerome Powell stressed this was a minority view.

“The strong bulk of the committee is not showing a rate increase during this forecast period,” Powell told a virtual press conference on March 17, following the decision, adding that the time to talk about
reducing the central bank’s asset purchases was “not yet.”

Seven of 18 officials predicted higher rates by the end of 2023 compared with five of 17 at the December meeting, showing a slightly larger group who see an earlier start than peers to the withdrawal of ultra easy monetary policy, according to the Federal Open Market Committee quarterly economic projections issued alongside its policy statement.

“Indicators of economic activity and employment have turned up recently, although the sectors most adversely affected by the pandemic remain weak,” the FOMC said in its statement. “Inflation continues to run below 2%. The Fed expects that a bump in inflation this year will be short-lived.

Officials saw their preferred measure of price pressures slowing to 2% next year following a spike to 2.4% in 2021, according to the projections. Excluding food and energy, inflation is forecast to hit 2.2% this year and fall to 2% in 2022. Ten-year Treasury yields remained near one-year highs after the statement with stocks reversing losses.

Asked about the move in yields, Powell noted that it was “important conditions continue to remain accommodative” and that he would be concerned by “disorderly markets,” repeating a line he used earlier this month.

Massive fiscal support and widening vaccinations that will help reopen the economy have buoyed investor expectations for rate increases and inflation, propelling Treasury yields higher as the Fed and
federal government keep adding stimulus. The March 17 decision was unanimous. —Bloomberg

Jocom raises $5.6 mil via 1X listing
Malaysian-based grocery mobile app provider Jocom International Holdings has listed 26.7% of its share capital on 1exchange (1X), Singapore’s first regulated private securities exchange, raising proceeds of some $5.6 million.

1X is the first regulated private securities exchange with a Recognised Market Operator licence granted by the Monetary Authority of Singapore (MAS).

It is part of CapBridge Financial, backed by Singapore Exchange (SGX), SGInnovate, South Korea’s Hanwha Investment and Securities Co, Hong Kong’s Cyberport Macro Fund and AMTD Digital. It aims to give private companies and funds the flexibility to list a portion of their shares in the form of tradeable private equities.

Established in 2015, Jocom — an acronym for “Just Order Conveniently on Mobile” — operates a mobile grocery store and has built a user base of three million, 500 vendors and 15,000 stock-keep units (SKUs) as at March 18.

Jocom, as Malaysia’s first grocery mobile app, has evolved into one of few end-to-end platforms for grocery shopping in the country. It has full control over the whole process from purchase to fulfilment. Jocom also controls its own platform, proprietary software, delivery fleet, and storage facilities.

Besides the mobile app, a significant portion of Jocom’s business over the last five years involved operating behind the scenes in the running of virtual shops and fulfilling orders on online marketplaces.

Funding from the 1X listing will be used to develop an AI-powered back-end system that can analyse demographics, customer preferences and spending power, and transform those data into actionable insights for targeted marketing activities.

The system will also support delivery logistics, inventory management and merchandise pricing, streamlining of processes and generating of cost efficiencies.

For FY2020, Joco’s revenue grew 30% y-o-y with the movement control orders driving online grocery purchases. Between 2015 and 2020, Jocom has generated approximately US$40 million in sales revenue.

Jocom also sells Malaysian products to Chinese consumers. It plans to expand its operations to other markets in Indonesia and Australia.

“Our outperformance during Malaysia’s MCO at the height of the Covid-19 pandemic has proven our resilience and relevance as an essential, mobile-enabled business and we believe this is an opportune time to launch an overhaul of our own platform,” says Jocom’s founder and CEO Joshua Sew.

“Funding aside, our new status as a listee on a private securities exchange backed by the SGX will also expose Jocom to a new pool of investors and enhance its positioning for more business opportunities in the future,” he adds. — Samantha Chiew

Singapore’s total employment sees sharpest fall in over two decades
Last year saw Singapore’s total employment excluding foreign domestic workers (FDWs) logging its sharpest plunge in over two decades, no thanks to the impact of the pandemic.

Total employment for the year was down by 166,600, according to a Ministry of Manpower (MOM) Labour Market report on March 16. This follows a decline in non-resident employment by 181,500, with the bulk of this coming from the construction and manufacturing sectors.

Cutbacks in the employment of foreigners were widespread, with significant reductions in the number among holders of Work Permits (–138,800), S Passes (–26,000) and Employment
Passes (–16,700).

Resident employment had conversely risen by 14,900 in 2020 — slightly higher than it was prior to the pandemic. This follows
improvements in hiring in 2H2020, namely in sectors such as public administration and education, health and social services, information and communications, financial and insurance services and professional services. However, the hiring sentiment was bleak in sectors such as aviation, accommodation and arts, entertainment & recreation as their activity was restricted throughout the year.

Meanwhile, Singapore’s unemployment rate edged up by 0.7 percentage points to 3.0% in 2020, from the 2.3% registered in the year before.

Unemployment among both residents and citizens rose, with resident joblessness hitting 4.1% in 2020, compared to 3.1% in 2019. Citizen joblessness meanwhile, inched up to 4.2% in 2020, from 3.3% in 2019.

Retrenchments in 2020 also came in at 26,110 — more than double the 10,690 layoffs in 2019. However, MOM notes that the incidence of retrenchment in 2020 – which was 12.8 retrenched persons per 1,000 employees — was lower than the 22.5 per 1,000 on average in the past recessionary years.

Interestingly, retrenchments had declined for the first time in 4Q2020 ended December, after five consecutive quarters of increases.

Total layoffs in 4Q2020 was 5,640, compared to 9,120 in 3Q2020 ended September and 8,130 in 2Q2020 ended June.

Looking ahead, MOM expects the recovery in the labour market to be gradual and uneven across the sectors. To secure a rebound the government has put in place several initiatives such as extending and enhancing the SGUnited Jobs and Skills Package.

It has also set aside an additional $5.2 billion to expand local hiring under the Jobs Growth Initiative.

“We will continue to support jobseekers’ reskilling and upskilling efforts, to help them prepare for jobs of the future and emerge stronger from the crisis,” MOM says. — Amala Balakrishner