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
Indonesia’s economy grew 4.95% in the third quarter, missing the projected 5% growth, as factory closures and job losses dampened consumption and investment. This slowdown comes as newly inaugurated President Prabowo Subianto aims to ramp up growth to as high as 8% during his term.
Key Factors Affecting Growth:
- Manufacturing Sector Decline: Labour-intensive industries like apparel and footwear are facing a significant drop in overseas demand, leading to factory shutdowns and increased debt distress among major players, including Sritex and Pan Brothers.
- Rising Unemployment: Job cuts surged 31% year-on-year by October, reaching nearly 60,000 as manufacturing activity contracted for the fourth consecutive month.
- Middle-Class Setback: About 9.5 million Indonesians have dropped out of the middle class since the pandemic, weakening a crucial driver of domestic consumption, which comprises more than half of Indonesia’s GDP.
Government Response
To support the economy, the government has:
- Extended Tax Perks: Incentives for home purchases aim to stimulate the property market.
- Imposed Import Duties: New tariffs are designed to protect local industries from cheaper imports.
- Monetary Policy Adjustments: Bank Indonesia has started lowering interest rates to encourage spending and investment, although further cuts have paused amid currency volatility.
Industrial Strategy Shift Needed
Economists suggest a shift towards export-oriented service industries, such as tourism, which could create more jobs and generate foreign exchange. While refining raw metals onshore has boosted growth, it has yet to produce sufficient employment.
The latest figures reveal the hurdles Indonesia faces as it navigates economic recovery, underscoring the need for diversified growth strategies to sustain its ambitious targets.
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