KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
Indonesia’s central bank maintained its policy rate at 6.25% on Wednesday, marking its third consecutive meeting of cautious pause aimed at supporting the rupiah.
Key Highlights:
- Policy Rate Unchanged: Bank Indonesia (BI) kept the BI-rate steady at 6.25%, a decision anticipated by all 35 economists surveyed by Bloomberg News. This rate is the highest since the benchmark was introduced in 2016.
- Governor's Stance: Governor Perry Warjiyo reaffirmed that the central bank would maintain the policy rate until the currency stabilizes. He mentioned that a rate cut might be considered in the fourth quarter.
Economic Outlook:
- Global Growth and Domestic Performance: BI maintained its global growth outlook at 3.2% for the year and expects Indonesia’s economic performance to stay strong in the second half. The GDP forecast for 2024 remains at 4.7-5.5% growth.
- Rupiah Strength: The rupiah has appreciated by about 1.5% against the US dollar this month, supported by returning foreign investments in Indonesian stocks and bonds. Warjiyo indicated that the currency is expected to strengthen further in line with central bank measures.
Inflation and Fiscal Risks:
- Inflation Control: Inflation is projected to remain within the 1.5-3.5% target range for this year and the next. However, widening fiscal and current account deficits pose risks to the rupiah.
- Leadership Transition: Investors are closely watching the country's leadership transition, concerned about potential increases in debt and budget deficits under the new administration.
Central Bank's Strategy:
- Market Tools: Bank Indonesia is prepared to use various market tools to manage volatility. These include intervening in the spot market, domestic non-deliverable forward (NDF) market, and bond markets. The central bank may also issue high-yielding rupiah securities (SRBI) to attract more inflows.
The central bank's cautious approach reflects its commitment to maintaining financial stability while navigating global economic uncertainties and domestic fiscal challenges.
Comments
Post a Comment