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Wednesday, June 10, 2015

Weakened Ringgit

A lot of us Malaysians are probably upset with the depreciation of the Ringgit. 

Weakened Ringgit



The Ringgit has weakened to multi-year low and breached the previous low of RM3.73 to the USD and according to a lot of research, it is inching towards the pegged level of RM3.80/USD.

This morning, while I was driving to work, I heard from BFM on their discussion. Apparently, our foreign reserve exchange is stand at an estimate of around 100 billion USD. 

If you're like me, you'll probably feel the pinch as I'm earning in RM. To talk about travelling would be a pain in the ass now because I'll have to fork out more most of the time. I suspect gadgets like Apple products might see another increase if the drop in the currency continues. Even then, Zeti insist that the RM is still strong and it's only at this level due to negative sentiments. I'm not sure if I'm buying it but as Ringgit continues to weaken, perhaps it's time to look at who's the biggest winners and losers in it.

BIGGEST WINNERS

Reading from The Star Online, Hong Leong Investment Bank (HLIB) Research expects the gaming sector, rubber products and technology stocks to be the main beneficiaries of the weaker ringgit. 

Gaming - revenue from US operations

Rubber Products - most sales in USD while cost in Ringgit 

Sea Transportation - almost all revenue in USD while there is a small portion of costs in Ringgit

Tech – majority sales in USD, partly offset by raw material cost in USD, outweigh US loan.


BIGGEST LOSERS

Automotive - higher cost of imported materials & CKD costs 

Air Transportation - higher fuel cost

Power - higher coal cost & USD debt

Telco - US$ debt


Well, whether we like it or not, the weakened Ringgit is here, and maybe it's time to think of how you can put your weakened Ringgit to help you add value. Perhaps some investment in stocks? Or maybe property? Well, if nothing else, I might as well spend it, at least my consumption power is stronger at present. What say you?

Monday, June 8, 2015

YTD Foreign Selling Rises to RM6.7 Billion, says MIDF Research



KUALA LUMPUR (June 8): Foreign selling on Bursa remained heavy last week, taking year-to-date foreign selling to RM6.7 billion after foreign investors sold RM926.1 million last week, according to MIDF Research.

In his weekly Fund Flow report, MIDF Research head Zulkifli Hamzah said that for the sixth consecutive week, foreign investors had been net sellers of Malaysian equity.

He said the amount offloaded was still close to the RM1 billion mark as investors classified as “foreign” sold equity listed in the open market on Bursa (ie excluding offmarket deals) on a net basis amounted to RM926.1 million.

Zulkifli said this was comparable to the RM999.8 billion sold the week before, adding it was the fourth highest in a week this year.

He said that again, foreign investors were net sellers every single trading day last week, and had been selling for the past 14 straight trading days.

Zulkifli said the amount exceeded the RM200 million mark on Tuesday and Thursday, making it 18 days so far this year that the amount had surpassed the threshold.

He said that in comparison, daily foreign sale exceeded RM200 million on 23 occasions in 2014.

“However, we note that the intensity of the foreign selldown abated significantly on Friday.

“The amount sold on Friday dropped to only RM73.4 million, the lowest during the 14-day selldown stretch.

“Nevertheless, after the strong US employment numbers released last Friday, the prospect for the foreign selldown to continue to abate is less promising,” he said.

Zulkifli said he estimates that there was still an overhang of about RM15 billion to RM20 billion of foreign portfolio liquidity on Bursa.

He said that last week’s selldown increased the cumulative net foreign outflow in 2015 to RM6.7 billion, almost matching the RM6.9 billion outflow for the entire 2014.

Zulkifli said foreign participation (daily average gross purchase and sale) on Bursa remained elevated at RM1.0 billion, but it declined 32% from that the week before.

“Local institutions mopped up RM989.7 million last week but participation rate fell to RM1.99 billion, the first time it dropped below RM2 billion in 11 weeks.

“Consistent with the school holiday season, retailers sold RM63.6 million, with average daily volume falling to its lowest this year at only RM579 million,” he said.

Source: YTD Foreign selling rises to RM6.7 billion, says MIDF Research