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.
Labour Party's claims that financial instability could have ensued if Chancellor of the Exchequer Rachel Reeves had not scrapped the winter heating subsidy for pensioners have been met with skepticism by market participants. The controversial decision to means-test the benefit, saving £1.4 billion this year, was part of £5.5 billion in cuts announced in July.
Key Points:
Skepticism from Market Participants: Investors and analysts have challenged Labour's assertion that scrapping the subsidy was necessary to avoid a run on the pound and rising interest rates. Michael Brown, a strategist at Pepperstone Ltd, dismissed the claim as "absolute nonsense," suggesting that the rhetoric is part of a political strategy by the new government to blame the previous Conservative administration for current financial issues.
Political Context and Reaction: Labour has framed its decision within the context of managing an alleged £21.9 billion of undeclared overspending inherited from the Conservative government. However, the Conservative Party disputes this claim, and critics argue that Labour's cuts may not have been as financially crucial as portrayed. The Liberal Democrats and Conservatives have called for a parliamentary vote on the subsidy issue.
Debate Within Labour: The decision has sparked internal debate within Labour over prioritizing public finances versus providing support to vulnerable demographics, such as pensioners. Some members are concerned about the political implications of cutting support instead of raising taxes on wealthier citizens. This debate is expected to intensify as Labour prepares for its budget announcement on October 30.
Investor Reactions: The skepticism from market experts and former advisers, like James Meadway, suggests that the financial markets do not view Labour's fiscal moves as having a significant impact on the pound, contradicting the party's claims of averting a financial crisis.
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