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Market Daily Report: Bursa Malaysia Ends Higher On Positive Sentiment, CI Up 0.83 Pct

KUALA LUMPUR, Nov 6 (Bernama) -- Bursa Malaysia closed higher today, buoyed by supportive local economic policies, positive sentiment from strong technology stocks earnings, and a favourable United States (US) market outlook, an analyst said. Add to that, Bank Negara Malaysia’s (BNM) decision to maintain the Overnight Policy Rate (OPR) at 3.0 per cent is poised to encourage domestic spending and investment. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 13.47 points, or 0.83 per cent, to close at its intraday high of 1,634.17, compared to Tuesday’s close of 1,620.70. The benchmark index opened 3.71 points higher at 1,624.41 and subsequently hit a low of 1,623.52 in early trade before trending upwards toward the closing session. Market breadth was positive, with advancers trumping decliners 849 to 352, while 428 counters were unchanged, 765 untraded, and nine suspended. Turnover expanded to 3.39 billion units
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China Reviews Debt Swap Proposal Amid Legislative Meeting

 

China’s National People’s Congress Standing Committee (NPCSC) has started discussions on a proposal to shift some off-balance-sheet debt of local governments onto their official accounts. This move could raise local government debt limits, marking the first such mid-year adjustment since 2015.

The proposed debt swap aims to alleviate financial burdens for local governments struggling with revenue declines and mounting financial obligations. Economists predict that the debt swap could involve between six trillion and ten trillion yuan (RM3.69 trillion to RM6.14 trillion), though details remain undisclosed.

Key Points:

  • Debt Swap Program: The plan would allow local governments to bring hidden debt into official accounts, freeing up funds for expenses like salaries and infrastructure. This debt is often tied to Local Government Financing Vehicles (LGFVs) created for infrastructure and urban development.
  • Market Speculation: Economists anticipate that this debt swap could proceed over several years. However, additional fiscal measures may not be introduced until the Central Economic Work Conference next month.
  • Economic Context: China's economy faces slowing growth, a real estate downturn, and reduced fiscal revenue, impacting local governments' ability to meet financial obligations.
  • Investor Sentiment: Investors and analysts view this debt swap as a positive move but remain cautious, particularly as they await further fiscal guidance and potential impacts from the US election.

The proposal reflects a strategic approach to manage local debt without immediately increasing central government borrowing, balancing fiscal needs with market expectations.

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