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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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China Considers Refinancing $5.4 Trillion in Mortgages to Boost Economy


China is considering a major move to allow refinancing of up to $5.4 trillion in mortgages, aiming to lower borrowing costs for millions of families and stimulate consumption. The plan would permit homeowners to renegotiate mortgage terms with their current lenders before January or switch lenders for the first time since the global financial crisis.

Key Takeaways:

  1. Refinancing Initiative to Support Economic Growth: The proposed refinancing plan aims to lower mortgage costs, which could ease financial burdens for homeowners and boost consumption. This measure comes amid mounting pressure on Chinese authorities to counter a housing-led economic slowdown, following a series of disappointing earnings from consumer companies and reduced growth forecasts from major financial institutions like UBS Group AG.

  2. Impact on Chinese Banks: Lower mortgage rates could significantly affect the profitability of Chinese banks, particularly state-run institutions. The sector is already grappling with record-low net interest margins, which fell to 1.54% as of end-June, well below the 1.8% level needed for reasonable profitability. Despite these concerns, the move could provide immediate relief to existing homeowners who have not benefited from recent rate cuts that mainly targeted new homebuyers.

  3. Wider Economic Implications: The new refinancing plan is part of China's broader efforts to revive its property market, which has been in crisis for four years, impacting jobs, consumption, and household wealth. While retail sales showed some improvement in July, overall consumption remains subdued, well below pre-pandemic levels. Analysts, including those at UBS, warn that the property market's weakness may have a more substantial negative effect on the overall economy than previously expected.

If implemented, this refinancing plan could offer a faster path to reducing mortgage burdens, potentially providing a much-needed boost to household spending and economic growth, albeit at the cost of further pressure on China's already struggling banking sector.

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