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 24): Bursa Malaysia closed higher, almost across the board, on Wednesday with the key index extending its winning streak to a nearly 16-month high as the market reacted positively to Bank Negara Malaysia's (BNM) decision to keep the overnight policy rate (OPR) unchanged.
Despite a mixed regional market performance, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 7.99 points to end the day at 1,504.1 from Tuesday's close of 1,496.11.
The highest level was last seen on Aug 30, 2022, when the index closed at 1,512.05.
The barometer index, which opened 1.05 points better at 1,497.16 in the morning, moved in positive territory throughout the day at between 1,497.16 and 1,504.44.
Market breadth was bullish with advancers overwhelming decliners 690 to 360, while 431 counters were unchanged, 806 untraded and 19 others suspended.
Turnover dropped to 4.34 billion units worth RM2.88 billion from 5.16 billion units valued at RM3.33 billion on Tuesday.
During its first meeting of the year on Wednesday, BNM's monetary policy committee (MPC) has decided to maintain the OPR at 3%, marking the fourth consecutive meeting that the committee has opted to hold the key rate.
The central bank said in a statement that, at the current OPR level, the monetary policy stance remained supportive of the economy and is consistent with the current assessment of the inflation and growth prospects.
“The MPC remains vigilant on ongoing developments to inform the assessment on the outlook of domestic inflation and growth, and will ensure that the monetary policy stance remains conducive to sustainable economic growth amid price stability," it said.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the OPR could stay at 3% in the near term, premised on the expected improvement in the economy this year despite the uncertainties over inflation that hinge on the subsidy rationalisation and price control measures.
“Overall, we think the monetary policy is already in a restrictive zone with real interest rates currently standing at 1.5% against a long-term average of 0.6%.
“Perhaps, the BNM would want to see how the implementation of subsidy rationalisation would affect the overall inflation and therefore, it seems to be quite vigilant in this respect," he said.
Mohd Afzanizam stressed that a stable OPR would mean the cost of borrowings would remain unchanged and allow households and businesses to make better plans if they decide to relook their liability structure.
"Among the options they can look at is to refinance their liabilities, especially when they took financing at a time when interest rates were at a higher trajectory," he added.
Among the heavyweights, Maybank Bhd and CelcomDigi Bhd added a sen each to RM9.10 and RM4.25 respectively, Public Bank Bhd and Tenaga Nasional Bhd gained two sen each to RM4.37 and RM10.52 respectively, CIMB Group Holdings Bhd rose 10 sen to RM6.12, and IHH Healthcare Bhd climbed seven sen to RM6.07.
Of the actives, Widad Group Bhd inched down half a sen to 18 sen, Malaysian Resources Corp Bhd and YNH Property Bhd increased 4.5 sen each to 58 sen and 65.5 sen respectively, while Handal Energy Bhd slipped a sen to 10 sen.
On the index board, the FBM Emas Index rose 64.02 points to 11,208.22, the FBMT 100 Index firmed 57.29 points to 10,859.33, and the FBM Emas Shariah Index increased 54.44 points to 11,293.29, and the FBM ACE Index added 7.54 points to 4,861.42, and the FBM 70 Index advanced 78.69 points to 15,204.41.
Sector-wise, the Financial Services Index expanded 65.13 points to 16,766.60, the Plantation Index improved 35.96 points to 7,191.76, the Industrial Products and Services Index inched up 1.08 points to 174.83, and the Energy Index gained 11.5 points to 869.66, while the Property Index bagged 16.73 points to 919.87.
The Main Market volume declined to 2.57 billion units worth RM2.56 billion from 2.96 billion units worth RM2.91 billion on Tuesday.
Warrants turnover surged to 804.39 million units valued at RM110.95 million versus 654.67 million units valued at RM81.17 million previously.
The ACE Market volume dwindled to 950.38 million shares worth RM198.37 million compared with Tuesday's 1.54 billion shares worth RM333.45 million.
Consumer products and services counters accounted for 265.59 million shares traded on the Main Market, industrial products and services (505.02 million); construction (198.48 million); technology (180.88 million); SPAC (nil); financial services (77.35 million); property (752.42 million); plantation (32.79 million); REITs (19.43 million), closed/fund (11,500); energy (243.91 million); healthcare (77.12 million); telecommunications and media (28.57 million); transportation and logistics (55.19 million); and utilities (129.63 million).
Bursa Malaysia Bhd and its subsidiaries will be closed on Thursday, in conjunction with Thaipusam. Operations will resume on Friday (Jan 26).
Source: The Edge
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