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
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:
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.
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.
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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