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...
Market Daily Report: KLCI closes lower as rising Covid-19 cases, political uncertainty continue to haunt market
KUALA LUMPUR (Aug 4): The FBM KLCI settled lower again today despite rises in regional markets, as investor sentiment continued to be dampened by rising Covid-19 infections and political uncertainty.
The benchmark index finished 8.93 points or 0.6% lower at 1,491.33.
“While regional markets like Taiwan, South Korea and Hong Kong, and even Singapore, are on a positive move, Bursa Malaysia continues to head south and is the worst performing market in the region,” said Areca Capital Sdn Bhd CEO Danny Wong.
Noting that local issues, especially political developments, are the main factors that are keeping investors away, Wong told The Edge: “This also means the market is pricing in the risks.”
He said today’s announcement by Prime Minister Tan Sri Muhyiddin Yassin that he will table a vote of confidence in Parliament next month is positive as it will provide clarity and direction for the country.
“Valuation wise the market is trading near 1.5 times SD below the PER mean. With increasing rates of inoculation and more people getting full vaccination, the market is pointing to recovery and economic reopening soon,” he added.
Bank Islam Malaysia Bhd economist Adam Mohamed Rahim also noted that the local market has once again bucked the steadier regional trend on the back of strong corporate profits recorded by companies on Wall Street.
“Investors today digested the latest political developments in the country while Covid-19 cases in the country reached another record high,” Adam said.
Malaysia reported 19,819 new Covid-19 cases today — a record number of daily infections — up 15.87% from yesterday’s 17,105.
Overall market breadth was negative, with 685 counters closing lower, versus 333 that rose and 411 that were unchanged.
A total of 3.66 billion shares were traded at a value of RM2.54 billion, compared with 4.16 billion shares worth RM2.72 billion yesterday.
Among the top losers were Malaysian Pacific Industries Bhd (down 70 sen or 1.53% to RM45.10), Nestle (M) Bhd (down 70 sen or 0.52% to RM133) and Vitrox Corporation Bhd (down 48 sen or 2.40% to RM19.50).
The top gainers were Genetec Technology Bhd (up 30 sen or 1.3% to RM23.30), B.I.G Industries Bhd (up 26 sen or 19.12% to RM1.62) and P.I.E Industrial Bhd (up 22 sen or 6.85% to RM3.43).
Dagang NeXchange Bhd, which saw 189.18 million shares traded, was the most actively traded stock of the day.
Meanwhile, Reuters reported that a bounce back in tech shares lifted up China’s main stock indexes today, as a private survey showed faster service sector growth, but worries over surging Covid-19 cases weighed on sentiment, keeping gains in check.
The Shanghai Composite index closed 0.85% higher at 3,477.22, while Hong Kong’s Hang Seng Index added 0.88% to 26,426.55.
South Korea’s KOSPI rose 1.34% to 3,280.38, but Japan’s Nikkei 225 finished 0.21% lower at 27,584.08.
Source: The Edge
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