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 (Aug 12): The FBM KLCI pared losses after closing down 8.1 points or 0.52% at 1,556.64 today as COVID-19 vaccine hopes prompted investors to buy beaten-down shares of companies badly affected by the coronavirus pandemic and sell shares of rubber glove manufacturers.
At 5pm, Bursa Malaysia notable gainers included KLCI constituents Genting Bhd and Genting Malaysia Bhd while leading decliners included KLCI-linked rubber glove manufacturers Top Glove Corp Bhd and Hartalega Holdings Bhd.
The rotational shift was observed since yesterday when investors bought oil and gas shares. Today, TA Securities Holdings Bhd analysts wrote in a note: "The strong rebound in oil & gas related stocks yesterday augurs well for trading sentiment, given the healthy rotational shift from the red hot rubber glove and healthcare sector which need to consolidate and neutralise their excessive overbought condition after enjoying dizzying profits.”
Across Bursa Malaysia, 19.16 billion securities were traded for RM7.99 billion. There were 907 decliners against 315 gainers.Leading decliner Top Glove’s share price closed down RM2.80 or 10.26% at RM24.50 while Hartalega fell RM2.18 or 11.91% to RM16.12.
Notable gainers included Genting-related companies besides KLCI-linked Public Bank Bhd and Hong Leong Financial Group Bhd.
Public Bank’s share price closed up 48 sen or 2.84% at RM17.40, Genting Bhd added 25 sen or 6.72% to RM3.97 while Genting Malaysia rose 19 sen or 8.41% to RM2.45.
Investors sold rubber glove shares across Bursa today on news Russia had become the first country to grant regulatory approval to a COVID-19 vaccine after less than two months of human testing.
It was also reported that the US has entered into an agreement with drugmaker Moderna Inc to acquire 100 million doses of its potential COVID-19 vaccine for around US$1.5 billion.
At a glance, such sentiment does not bode well for rubber gloves' demand as the confirmation of a viable COVID-19 vaccine is expected to curb the spread of the global outbreak.
However, such sentiment is seen auguring well for casino and hotel operator Genting, the businesses of which have been disrupted by global COVID-19 driven movement restriction policies to curb the spread of the pandemic.
For the oil and gas sector, anticipation of a successful curb of the COVID-19 pandemic due to vaccine discoveries is expected to lead to a recovery in global crude oil demand in line with the revival of the transport industry, which include airlines.
Hong Leong Investment Bank Bhd senior analyst Ng Jun Sheng told theedgemarkets.com that “interest will gradually shift back to blue-chips or value stocks” as investors weigh corporate earnings during the current reporting season for the April-to-June quarter.
Besides corporate earnings, Ng said today investors are also anticipating the announcement on Malaysia’s 2020 second quarter Gross Domestic Product (GDP) numbers this Friday (Aug 14).
"All eyes are also on Malaysia's GDP data this week,” said Ng.
Globally today, it was reported that Asian stocks slipped on Wednesday on growing uncertainty over whether US lawmakers would strike an agreement on an additional round of big fiscal stimulus to support an economy still struggling with the coronavirus pandemic.
"Hopes of vaccine development, however, prompted some investors to reduce safe-haven assets such as gold and government bonds, and to buy back battered stocks of companies hit hardest by the virus,” Reuters reported.
Source: The Edge
Comments
Post a Comment