KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
The ringgit is forecast to remain under pressure against the US dollar in the near term, driven by the Federal Reserve’s less dovish monetary stance, according to Kenanga Research.
Key Projections
- Exchange Rate: The ringgit is expected to stay above 4.50 against the US dollar going into 2025.
- Recent Performance: The ringgit, which had gained 15% against the dollar between January and September, has since retreated amid the strength of the US economy. It last traded at 4.5060, up 1.88% year-to-date.
Factors Influencing the Ringgit
- US Economic Strength: Strong domestic demand and inflationary pressures are propping up the dollar.
- Fed’s Monetary Policy: The Fed’s cautious approach to rate cuts bolsters the dollar’s appeal, with markets anticipating only one rate cut in 2025.
- Trump’s Policies: Uncertainty around policies under the incoming US administration may lead the Fed to delay cuts further.
Outlook for 2025
- Kenanga projects two to three Fed rate cuts in 2025, which could provide relief for the ringgit in the latter half of the year.
- In Malaysia, Bank Negara’s overnight policy rate is expected to remain steady at 3% through 2025.
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