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Market Daily Report: Bursa Malaysia Closes Higher On BNM’s OPR Decision, Wall Street Gains

KUALA LUMPUR, Nov 5 (Bernama) -- Bursa Malaysia closed higher, buoyed by Bank Negara Malaysia’s (BNM) decision to maintain the Overnight Policy Rate (OPR) at 2.75 per cent, alongside positive cues from Wall Street. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 19.30 points, or 1.19 per cent, to 1,635.86 from Wednesday’s close of 1,616.56. The benchmark index opened 6.72 points higher at 1,623.28, and fluctuated between an intraday high of 1,642.44 and a low of 1,622.62 during the trading session. However, market breadth was negative, with losers outnumbering gainers 723 to 497, while 466 counters were unchanged, 1,075 untraded and 10 suspended. Turnover rose to 3.74 billion units valued at RM3.61 billion compared with yesterday’s 2.81 billion units valued at RM2.57 billion.
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UK Borrowing Falls Short in November but Reeves Faces Fiscal Tightrope

The UK government reported a smaller-than-expected budget deficit in November, offering a brief respite for Finance Minister Rachel Reeves, who faces mounting challenges to balance public finances amid a slowing economy and rising inflation.

Key November Borrowing Figures

  • Public Sector Net Borrowing:
    • £11.249 billion, lower than the £13 billion forecast by economists polled by Reuters.
    • A £1.8 billion reduction in inflation-linked debt compensation due to a 0.3% fall in the retail price index(RPI) in September helped narrow the deficit.

Year-to-Date Borrowing

  • April–November 2024/25 Financial Year:
    • Borrowing totaled £113.2 billion, similar to the same period in 2023/24.
    • Despite November’s improved figures, borrowing has exceeded expectations in eight out of 11 months in 2024.

Challenges Ahead for Reeves

  1. Fiscal Rules Under Strain:

    • Reeves pledged to balance day-to-day spending with tax revenues by the end of the decade.
    • Plans include significant borrowing for public services and infrastructure investment, diverging from previous Conservative policies.

  2. Economic Headwinds:

    • Zero GDP Growth: The Bank of England predicts stagnation for Q4 2024.
    • Rising Inflation: Recent upticks could drive higher borrowing costs.
    • Alison Ring of ICAEW warns that "money remains extremely tight and that is unlikely to change any time soon."

  3. Tax Increases:

    • Reeves’ budget announced the largest tax hikes in three decades, primarily through higher employer social security contributions, to stabilize public finances.

Revised October Borrowing Data

  • October’s borrowing was adjusted upward by £800 million, highlighting ongoing volatility in fiscal metrics.
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