5. Malaysia to implement Employee Insurance Scheme next year.

Deputy of Human Resources Minister, Mr Ismail Muttalib has announced recently that
Malaysia will be implement a scheme to help jobless Malaysian’s who are retrenched from
work or resigned due to occurrence of work-related threats. This scheme, Employee Insurance
Scheme (EIS) are managed under Social Security Organization (SOSCO) will allows workers
who falls into the two categories mentioned to receive monetary funds in the following or up
to 6 months from the term of unemployment (Kaur, 2017). However, there are four situation
where employees will not entitle the employees to make such claims;
i. Employees whose contracts were not renewed with their respective employers
ii. Employees who are terminated due to disciplinary matters
iii. Employees who reached mandatory retirement age
iv. Employee spouse’s of the pass on of the employee
The monthly contribution towards Employee Insurance Scheme (EIS) derives from both
employers and employees at 0.2% but it will be capped at RM4000 (Brohier, 2017).
As the head of strategic planning and risk management for SICMA Group Berhad,
implementation of this Employee Insurance Scheme has brought benefits for our organization.
Back in the year 2015 during the unstable economic environment, majority of the organization
has taken decision to retrench their employees to reduce organization cost. According to
Brohier (2017), retrenchment of employees requires employers to pay approximately 4.5
months of employee’s salary. Implementation of this scheme has certainly reduces the cost of
the organization, as we as the employers will only have to contribute to 0.2% of the employee’s
salary. In financial perspective of a huge corporation with thousands of employees, such
scheme definitely save up a cost in termination benefits compared to the previous layoffs and
termination that solely rely on employers financial compensation and reimbursement. Apart
from that, the implementation of EIS allows the insured individuals to adequately survive
during the unemployment period.
9. Storm warning for Bangkok as flood crises deepens in provinces.

Article reported by Mokkhasen (2017) on Bangkok weather has draw global attention.
The adverse weather condition and flood situation in Bangkok has impacted more than 260,000
people nationwide as reported by Mokkhasen. In addition to that, Meteorological Department
also reported that the adverse weather will affect not only the northeast of Thailand but also
the South China Sea. Since Malaysia was the neighbouring country of Thailand, it is hardly to
escape from such incident.
Such natural risk has the probability of affecting SICMA Group Berhad subsidiaries
especially SICMA SemiCon Sdn Bhd and SICMA Hotels Sdn Bhd. Natural risk has
significantly affect one of the group’s revenue source, SICMA SemiCon Sdn Bhd that
specialized in semi-conductor wafer manufacturing company. SICMA SemiCon Sdn Bhd
export its products to over 50 over countries. Such natural disaster has significantly affect the
export of products to Thailand. The use of products produced by our subsidiary will decrease
as the focus of government and clients will be on reverting the social needs of the country’s
people. Apart from that, the natural disaster has great possibility of affecting business
operations throughout the nation. Thus, decrease in productivity of the nation will generate
pressures in the delaying of importing raw materials for project completion.
Next, SICMA Hotels Sdn Bhd that focused in hospitality and tourism industries in
Langkawi and Negeri Sembilan may also be affected with the adverse weather condition in
Bangkok, Thailand. As we mentioned that Malaysia was located next to Thailand, the drastic
weather may affects the tourism industry in Malaysia. Tourism industry was heavily affected
as tourist will choose not to travel during in the drastic weather that highly may lead to floods
in neighbouring country of Thailand. Therefore, this significantly affect one of the subsidiary
business, SICMA Hotels Sdn Bhd especially hotels and resorts that are based in Langkawi.
Travel agencies in Langkawi was heavily affected as not only there is less inflow of
international tourists as well as local visitors.
14. Malaysia’s Q3 GDP growth slips to 4.4% for fourth straight quarters.

Malaysia’s third quarter GDP (July to September) has been released, and it slips to 4.4%
for fourth straight quarter. The central bank of Malaysia (Bank Negara Malaysia) has stated
that the spending on household and private spending have increased 9% and 6.9% respectively,
however the GDP slowing down due to the effect natural gas and palm oil (Malaysia Q3 GDP
Growth, 2018). GDP will influence a company. Different type of risks may be faced by a
company especially when the GDP is dropped or growing slow, such as economic risk, market
risk, and planning risk.
First is economic risk. The slowing down of Malaysia’s GDP may cause economic risk.
It indicates that the country is not growing in a high degree compared to previous quarter. The
rate of currency may drop compared to other country especially to the country which has high
GDP growth. It may causes inflation especially to the goods and products that are imported
from overseas. This situation brings both advantages and disadvantages to SICMA Group
Berhad. SICMA Property Sdn Bhd and SICMA Auto Sdn Bhd may be suffered from the
disadvantages as the imported material (property) and the parts for automotive may increase in
price. While SICMA Hotels Sdn Bhd and SICMA SemiCon Sdn may gain advantage as more
tourists will come when our currency is low and our products is cheaper and easier to be sold
in foreign country.
The slowing down of the GDP’s growth may also results in the market risk as the
demand may be reduced. Demand is due to the slowing down of economic and the increase in
price caused by inflation. The decrease in demand will affect all the subsidiaries of SICMA
Group Berhad except SICMA SemiCon Sdn Bhd which its business is focused on foreign
market. The decrease in demand will affect the revenue of all the subsidiaries.
Furthermore, planning risk is another risk that may be faced by all the subsidiaries
within SICMA Group Berhad when the GDP is slowing down. If a GDP is forecasted to grow
stronger in the next few quarter, a company can develop a strategy to expand the business.
Meanwhile, if the GDP shrinks, a company’s business planning will not be focused on
expanding, but in surviving (Sarfin, 2017).
REFERENCES
Brohier, M. (2017). Here's How EIS Will Affect You. iMoney.my Learning Centre. Retrieved
from https://www.imoney.my/articles/employment-insurance-system-eis
Kaur, M. (2017). Insurance scheme to help those who lose jobs. Free Malaysia Today News.
Retrieved from
https://www.freemalaysiatoday.com/category/nation/2017/03/09/insurance-scheme-
to-help-those-who-lose-jobs/
Mokkhasen, S. (2017). Storm warning for Bangkok as flood crisis deepens in provinces, 7
dead. Khaoso English. Retrieved from
http://www.khaosodenglish.com/news/2017/10/23/storm-warning-bangkok-flood-
crisis-deepens-provinces-7-dead/
Malaysia Q3 GDP Growth Slips For A 4th Straight Quarter to 4.4%. (2018). Channel Newasia.
Retrieved from https://www.channelnewsasia.com/news/business/malaysia-q3-gdp-
growth-slips-4th-straight-quarter-4-4-per-cent-10938690
Sarfin R. L. (2017). How does the GDP affect a country’s economy? Chron. Retrieved from
https://smallbusiness.chron.com/how-does-gdp-affect-economy-8750996.html