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 (Jan 14): The FBM KLCI closed down 0.98 points or 0.06% at 1,635.71 today while Bursa Malaysia’s Technology Index rose over 3% to become the top percentage gainer among bourse gauges as investors weighed the economic impact of the nation’s reenforced Covid-19-driven Movement Control Order (MCO) across several states and federal territories.
Analysts said the MCO is expected to hurt Malaysia's economic and corporate earnings growth although such restricted-movement policy is also seen as a boon for Bursa-listed technology companies such as semiconductor manufacturers due to anticipation of higher demand for computer-related products.
“I think corporate earnings recovery and economic recovery will be slower over the next one to two quarters,” Inter-Pacific Securities Sdn Bhd head of research Victor Wan told theedgemarkets.com today.
Across Bursa today, 6.49 billion securities were traded for RM4.86 billion. There were 584 gainers versus 583 decliners.
Bursa top gainers included semiconductor manufacturers Unisem (M) Bhd and Malaysian Pacific Industries Bhd (MPI).
Unisem’s share price closed up 41 sen or 6.15% at RM7.08, while MPI rose 30 sen or 1.08% to RM27.98.
Before markets closed, Unisem and MPI's share prices had earlier today risen to their record highs at RM7.16 and RM28.98 respectively.
The Unisem and MPI share price rise had partly contributed to Bursa Technology index's 3.46% gain today.
The KLCI closed down today on profit taking after the 30-stock index rose to its intraday high at 1,646.24.
Yesterday, the KLCI closed up 24.65 points or 1.53% at 1,636.69 as the reenforcement of the various levels of the MCO and implementation of the emergency declaration across Malaysia dictated market sentiment.
Today, TA Securities Holdings Bhd analysts wrote in a note that “blue chips rose on Wednesday, led by banks, energy and technology stocks as hopes increase MCO 2.0 will have a less dire economic stress, and subsiding domestic political uncertainty following the emergency declaration”.
Inter-Pacific’s Wan said the Malaysian stock market is looking for catalysts to move on after pricing in the MCO and emergency declaration.
"Whatever that was announced in the second round of the MCO and the state of emergency has already been priced in,” he said.
Yang di-Pertuan Agong Al-Sultan Abdullah Ri'ayatuddin Al-Mustafa Billah Shah had on Tuesday (Jan 12) declared an emergency across Malaysia after the government announced on Monday the implementation of various levels of the MCO to curb the Covid-19 pandemic.
On Monday, the government reinstated the MCO in Penang, Selangor, Melaka, Johor and Sabah as well as the federal territories of Kuala Lumpur, Putrajaya and Labuan for a two-week period starting from today.
In a national address on Monday, Prime Minister Tan Sri Muhyiddin Yassin said these states and federal territories were considered high-risk areas following a risk assessment as well as the evaluation of health services by the Ministry of Health.
Meanwhile, the conditional MCO would be enforced in six other states — Pahang, Perak, Negeri Sembilan, Kedah, Terengganu and Kelantan — while Perlis and Sarawak would be under the recovery MCO during the same period.
The state of emergency, meanwhile, will be enforced across Malaysia up to Aug 1, 2021 as a proactive measure to contain the Covid-19 pandemic in the country.
Globally today, it was reported that US Treasuries slipped on Thursday on a report that President-elect Joe Biden will announce a stimulus package as big as US$2 trillion, while Japanese stocks surged to a new three-decade peak as investors extended bets on a global growth rebound.
It was reported that the yield on benchmark 10-year US Treasuries rose two basis points to 1.1105% after CNN reported on the possibility Biden could spend US$2 trillion, which is much more than market expectations and would be funded by borrowing.
"Japan's Nikkei closed up 0.9% at its highest level since August 1990. It has gained 25% since the end of October. MSCI's index of Asia shares outside Japan was steady, a whisker short of Monday's all-time high. S&P 500 futures, FTSE futures and EuroSTOXX 50 futures all rose about 0.2%.
“[In commodity markets,] oil prices edged higher on Thursday after a drawdown in US crude stocks for a fifth straight week and robust data from China showing a surge in imports, though mounting coronavirus cases globally capped gains. Brent crude oil futures gained 13 cents, or 0.2%, to US$56.19 a barrel by 0744 GMT, while US West Texas Intermediate (WTI) increased 20 cents, or 0.4%, to US$53.11 a barrel,” Reuters reported.
Source: The Edge
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