KUALA LUMPUR, Nov 19 (Bernama) -- Bursa Malaysia gave up earlier gains to end mixed today, amid a higher regional market showing, as property, construction, and healthcare counters attracted buying interests, while plantation, banking, and telecommunication stocks saw some profit-taking, an analyst said. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 1.70 points to close at 1,602.34 from yesterday’s close of 1,604.04. The benchmark index, which opened 0.86 of-a-point lower at 1,603.18, moved between 1,601.02 and 1,608.88 during the trading session. However, the broader market was mixed to higher, with gainers leading decliners by 565 to 438 while 502 counters remained unchanged, 961 untraded, and 14 suspended. Turnover narrowed to 2.83 billion units valued at RM2.08 billion versus 2.96 billion units valued at RM2.23 billion yesterday. Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the benchmark index remained range-bound and it required a dec
Emerging market (EM) currencies saw gains as investors prepared for a week of global interest-rate decisions affecting carry trades in developing economies.
MSCI’s index for developing-world currencies recorded its second gain in nine sessions, rising less than 0.1% as of 10am in London. Meanwhile, the EM stocks gauge fell 0.3%, led by declines in tech shares, including Tencent Holdings Ltd and Taiwan Semiconductor Manufacturing Co Ltd.
Barclays strategists noted increased unpredictability in market moves recently due to political surprises globally. This volatility has impacted carry trades, where traders borrow at lower interest rates in developed markets to invest in higher-yielding developing-world assets. The strategists, including Themistoklis Fiotakis, highlighted that the case for carry trades is weaker, given the volatility and potential for further disruptions.
Volatility Spikes Navigating a gradually slowing US economy and uncertainties surrounding the upcoming US presidential elections, investors face a turbulent market. Volatility spikes can quickly erode carry gains, complicating investors' ability to maintain positions. With limited cushion from US rate spreads and emerging currencies already priced to erode, the carry trade case remains weak.
Carry trades funded in yen and dollars have suffered the most, with Chile’s peso and the Taiwanese dollar being particularly affected. Both the Bank of Japan (BOJ) and the Federal Reserve are set to decide on interest rates on Wednesday. The possibility of further policy tightening by the BOJ sent the yen to an almost three-month high last week.
Investors will closely examine the Fed’s policy announcement and chair Jerome Powell’s remarks for any hints supporting expectations of a first interest-rate reduction in September.
Regional Developments In Latin America, Venezuela’s opposition claims it can prove Edmundo González won Sunday’s election, according to María Corina Machado, who led the campaign against President Nicolás Maduro.
India took steps to limit foreign ownership of its bonds, signaling discomfort with the substantial inflows linked to the inclusion of its debt in a key global index.
Ethiopia’s eurobond saw its most significant jump since December after securing a $3.4 billion program with the International Monetary Fund, pushing the security maturing in 2024 to its highest level since November 2021.
Key Takeaways:
- Emerging market currencies gained slightly as global interest-rate decisions approached.
- MSCI’s index for developing-world currencies rose less than 0.1%, while the EM stocks gauge fell 0.3%.
- Volatility and political surprises have impacted the viability of carry trades.
- The BOJ and Federal Reserve's upcoming rate decisions are critical for market direction.
- Regional developments include Venezuela’s election dispute, India's bond ownership limitations, and Ethiopia’s IMF deal.
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