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.
Annual inflation in the Philippines slowed to 3.3% in August, reaching a seven-month low as price increases in food and transport costs moderated, according to the statistics agency. This slowdown provides room for the central bank, Bangko Sentral ng Pilipinas (BSP), to further ease interest rates.
Key Highlights:
Inflation Data:
- The Consumer Price Index (CPI) rose by 3.3% in August, down from 4.4% in July, bringing the average inflation rate to 3.6% for the first eight months of the year.
- This is within the central bank's comfort range of 2% to 4% and marks the slowest inflation rate since January's 2.8%.
- Core inflation, excluding volatile food and energy prices, also fell to 2.6%.
Factors Contributing to Slowdown:
- Easing in food and transport costs, especially rice inflation, which decreased to 14.7%, the lowest since October 2023.
- Tariffs on rice were reduced from 35% to 15% by President Ferdinand Marcos Jr., contributing to a slower price increase than initially expected.
Central Bank's Stance:
- The BSP stated that lower rice tariffs could further help ease inflation in the coming months, while risks to inflation are expected to tilt downwards this year and next.
- The BSP remains cautious, indicating that it will adopt a "measured approach" to ensure price stability.
Prospects for Further Rate Cuts:
- Nicholas Mapa, an economist at Metropolitan Bank and Trust Co., suggested that the August inflation data opens the door for further rate cuts this year.
- BSP Governor Eli Remolona indicated there could be room for another interest rate cut, following the 25 basis points reduction in August, the first cut since November 2020.
The moderation in inflation provides the central bank with flexibility to consider additional rate cuts to support economic growth while maintaining price stability.
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