PETALING JAYA: Jewellers are raking in sparkling profits as the demand for gold continues to rise during the Covid-19 pandemic.
Many jewellery retail chains have reported unprecedented sales during this period as gold, which is seen as a hedge against inflation, retains its lustre.
Since the movement control order (MCO) was implemented in March, the demand for gold has skyrocketed.
The owner of the Kedai Emas Merchant9 in Kuala Lumpur, Nik Haniff Nik Hamid, saw a 100% increase in profits over last year.
He told theSun yesterday that although the market seems to be erratic with the price of gold fluctuating, many Malaysians continue to invest in gold .
The price of gold has spiked since the beginning of 2019. It hit an all-time high in August and has seen a slight dip, but is still holding strong in the higher end of the price bracket.
“The current trend of buying gold as ‘safe havens’ during recession started in March and the trend is ongoing, so the return revenue soared unlike in previous years.”
Nik Haniff added that this is all the more reason for people to buy gold as the price has dropped since August due to news of the impending availability of Covid-19 vaccines.
However, he said this has resulted in a saturated market as many enterprising people in the country are seizing the opportunity to operate a gold business.
“Due to the sudden rise in demand for gold, more new players has emerged in the market, so it is definitely more competitive this year.”
It is indeed a year of fortune for goldsmiths as another player, Makmur Gold, was reported by Channel News Asia to have achieved a whopping RM80 million in transactions. An agent, who sells gold on its behalf, made half a million ringgit in sales over the course of three months by buying and reselling gold jewellery on a part-time basis.
Federation of the Associations of Malaysian Jewellers and Goldsmiths president Datuk Steven Siow Dek Kuen said revenues gained up to 50% profit, mainly due to the lockdown and government financial aid.
However, he added that it does not reflect the profit margin due to the fluctuating price of gold and the intense competition among old and new retailers.
“The sales went up between March and August due to the increased gold price,” Siow said.
“Between September and November, profits dropped due to the lower gold price and the consumers’ pattern is to wait for the price to dip again. But we foresee the gold price will rise again and expect business to pick up.”
Overall sales rose by 40% in May and June while the total nationwide figure reached RM1 billion in those two months. The figure could be higher given that it was based on data extracted from only 1,500 members of the federation, he pointed out.
Poh Kong Holdings Bhd net profit for its first quarter ended Oct 31 surged by 81.1% to RM14.64 million from RM8.08 million in the same quarter of the previous year. Its revenue for the quarter stood at RM221.91 million, an 8.2% increase from RM205 million previously.
