The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
Malaysia’s consumer stocks are poised for a rebound, supported by a stronger ringgit, according to Singular Asset Management, the country’s top-performing fund. Kok Lin Teoh, founder and chief investment officer, expects better margins for companies as the cost of importing raw materials becomes cheaper, boosting earnings growth in the next two to three years.
Teoh, who manages about US$400 million (RM1.6 billion) across Asia-focused funds, is now shifting the focus of the Singular Value Fund towards domestic consumption-related stocks, including banks and consumer companies, to capitalize on local opportunities. “We are reducing our exposure to export-oriented industries because the ringgit has strengthened, and moving back into more domestic sectors,” he explained.
After hitting a 26-year low, the ringgit has surged 14% in the three months leading up to September, outperforming other emerging market currencies. This, along with rising wages for civil servants and increased disposable incomes, is expected to drive consumer spending and benefit the consumer sector.
While local consumer stocks have lagged, rising just 2.6% this year compared to the 14% gain in the FTSE Bursa Malaysia KLCI Index, Teoh is optimistic about their future. His Singular Value Fund, with a return of 31% this year, has outperformed 95% of its peers, according to Bloomberg data. Teoh is also repositioning into financial stocks and firms that are expected to gain from growing direct investments into Malaysia.
Teoh highlighted the political stability achieved by the Malaysian government as a key factor in attracting foreign investments, positioning the fund to benefit from these investment themes in the coming years.
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