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Market Daily Report: Bursa Malaysia Ends Higher In Line With Most Regional Markets

KUALA LUMPUR, Sept 20 (Bernama) -- Bursa Malaysia ended higher on Friday in line with most Asian markets, mirroring gains from Wall Street, where investors welcomed the US Federal Reserve's substantial interest rate cut. The FTSE Bursa Malaysia KLCI (FBM KLCI) rose by 3.17 points, or 0.19 per cent, to 1,668.82 at the close from Thursday's close of 1,665.65. It opened 5.03 points higher at 1,670.68, trading between 1,668.48 and 1,674.04 throughout the session. In the broader market, gainers outpaced decliners 732 to 468, while 465 counters were unchanged, 850 untraded and 32 suspended. Turnover swelled to 4.19 billion units worth RM5.97 billion, from Thursday's 3.99 billion units worth RM4.08 billion. UOB Kay Hian Wealth Advisors head of investment research, Mohd Sedek Jantan, noted the FBM KLCI's gains were led by utilities, logistics, and banking stocks, reflecting improved market sentiment. Additiona
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Ringgit Close to Erasing Losses as State Firms Bolster Currency

The Malaysian ringgit is showing strong signs of recovery, driven by robust economic growth and expectations of an imminent interest rate cut by the Federal Reserve (Fed).

After hitting a 26-year low in February, the ringgit is now less than 1% away from recovering its losses for the year. Oversea-Chinese Banking Corp predicts that the ringgit will appreciate to 4.60 per dollar by mid-2025. As of early Wednesday, the local currency rose 0.2% against the US dollar.

Factors Supporting the Ringgit's Rebound:

  1. State Support and Currency Measures:

    • Bank Negara Malaysia has encouraged state-linked firms to repatriate and convert foreign income.
    • The central bank has utilized forwards to support the ringgit.

  2. Global Technology Cycle:

    • An upturn in the global technology cycle is aiding the recovery of Malaysian exports.

  3. Yield Differential Dynamics:

    • The Fed's anticipated rate cut is expected to narrow the record discount to the US, making ringgit-denominated assets more attractive to dollar-based investors.

Expert Opinions:

  • Christopher Wong, OCBC Foreign Exchange Strategist:
    • Predicts that the ringgit will recover as the Fed moves closer to cutting rates.
    • Highlights foreign inflows into local shares, recovery in the semiconductor cycle, and potential recovery in the Chinese economy as additional support factors.

Economic Indicators:

  • US Swaps Market:

    • Pricing in a full quarter-point cut by September, which would enhance the appeal of ringgit assets for dollar investors.

  • Exports:

    • Malaysian exports returned to positive territory in Q2 2024, after contracting for 12 out of the previous 13 months due to weak demand from China.

  • GDP Growth:

    • Malaysia's second-quarter GDP beat all estimates, suggesting continued economic momentum.
    • This growth supports the central bank’s decision to maintain steady borrowing costs, further bolstering the ringgit.

The ringgit has emerged as Asia's top performer over the past three months, reflecting renewed investor confidence and strategic economic policies aimed at stabilizing and strengthening the currency.

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