KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Beijing’s Banking Stimulus Plan
- China to inject at least 400 billion yuan ($55B) into major banks as part of an economic stimulus package.
- The first batch includes Agricultural Bank of China and Bank of Communications, with the plan expected to be completed by June.
- Total capital injection could reach 1 trillion yuan ($138B), funded by special sovereign bond issuance.
Market & Banking Sector Impact
- Agricultural Bank of China (+2.6%) and Bank of Communications (+2.2%) gained in Hong Kong following the news.
- China’s banking regulator first hinted at capital replenishment in September 2024, with further confirmation from the Ministry of Finance.
- Despite Chinese banks exceeding capital requirements, they face shrinking margins, rising bad debt, and profit pressures.
Economic Context & Policy Moves
- China has enacted broad economic stimulus measures, including:
- Mortgage rate cuts
- Lower key policy interest rates
- Encouraging more lending to support economic growth
- This is the first major state-funded bank recapitalization since the 2008 financial crisis.
Summary:
- China to inject at least $55B into key banks, possibly rising to $138B.
- Funding will come from special sovereign bonds.
- Banks like Agricultural Bank of China & Bank of Communications saw stock gains.
- Move aims to strengthen the banking system amid weak profits and rising bad debt.
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