The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
KUALA LUMPUR (Feb 28): The equity rout, which was triggered by the Covid-19 outbreak gathered steam today, especially after the overnight bloodbath on Wall Street; the Dow Jones Industrial Average has tumbled more than 2,000 points this week.
A strong wave of selling has swept across Asia. Malaysia, which is currently embroiled in a political crisis, is not spared from it. The RM20 billion stimulus package that was unveiled by interim Prime Minister Tun Dr Mahathir Mohamad did not entice any investing interest.
The benchmark index FBM KLCI fell 1.52% or 22.95 points to 1,482.64 points. The fall was not as sharp as its regional peers, such as Japan's Nikkei 225, which shed 805.2 points or 3.67%, Thailand’s SET Index, which tumbled nearly 4% or 55.31 points, Singapore’s Straits Times Index, which lost 100.6 points or 3.23%.
Dealers explained the fall on local bourse was not as steep mainly because of lower exposure to foreign funds given that most of them had already sold out of the Malaysian market in the past two years.
On the home front, adding to the cautious sentiment is the political drama that has started since last Sunday (Feb 23). Political risk of the market has heightened instantly, said analysts.
There might not be panic selling as yet; however, the political uncertainties have deterred buying interest, they said.
“The market will not settle until these two matters are resolved – the risk arising from the Covid-19 outbreak, and the uncertainty on the political front,” Areca Capital Sdn Bhd chief executive officer Danny Wong Teck Meng told theedgemarkets.com.
“The economic stimulus package is a step forward to address the virus outbreak, but [the] impact of some initiatives will come in much later,” said Wong.
For the week, the FBM KLCI went down 3.2% or 48.56 points to the lowest level since December 2011. However, the fall on Bursa Malaysia Small Cap Index was drastic, tumbling 9.72% or 1,371.7 points during the week to 12,736.02 points today.
Across Bursa Malaysia, some 5.09 billion shares valued at RM4.79 billion were traded. Decliners led gainers by 1,055 counters against 126 counters, while 229 traded unchanged.
Malaysia is set to end its fifth day without a federal government, raising the possibility of a snap election being called. The Yang di-Pertuan Agong today called on political parties to again name their prime minister candidate.
Meanwhile, there was renewed pressure on the local currency this week. The local currency weakened to RM4.2150 as at 6pm today against the US dollar compared with RM4.1915 last Friday.
Source: The Edge
Comments
Post a Comment