KUALA LUMPUR, Dec 16 (Bernama) -- Bursa Malaysia extended its positive performance, closing higher for a fourth consecutive session, supported by improving local market sentiment underpinned by a firm domestic macroeconomic backdrop. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.59 points, or 0.28 per cent, to 1,648.31, from Monday’s close of 1,643.72. The index had opened 0.95 of a point lower at 1,642.77, and moved between 1,636.50 and 1,648.71 throughout the trading session However, on the broader market, decliners beat gainers 699 versus 408. A further 520 counters were unchanged, 1,149 untraded and 12 suspended. Turnover rose to 2.59 billion units worth RM2.27 billion from 2.50 billion units worth RM2.16 billion on Monday.
Key Takeaway: Eurizon SLJ Capital CEO Stephen Jen expects the Chinese yuan to strengthen significantly to the low-6 range per dollar, citing global pushback risks, capital repatriation potential, and undervalued Chinese assets.
Current Performance
Yuan up 2.4% vs. USD in 2025, trading near 7.13 per dollar.
However, it has weakened against other major currencies:
-9.6% vs. euro
-5% vs. pound
-4.6% vs. trade-weighted basket
This divergence has fueled perceptions of an “opportunistic devaluation.”
Jen’s Bullish Case
Target: Yuan in the low 6s, potentially around 6.25/USD (~14% appreciation).
A stronger renminbi could:
Ease trade tensions by countering claims of predatory FX policy.
Attract foreign capital inflows into undervalued Chinese markets.
Encourage repatriation of US$2.5 trillion in overseas liquid assets held by Chinese firms.
“A more reasonably priced renminbi and a less predatory exchange rate policy would earn China some goodwill,” Jen said.
Market Context
Hedge funds have increased bullish yuan bets via options after weak US jobs data.
A 20% rally in CSI 300 Index since April has boosted inflows, reducing the case for more monetary easing.
Other banks also see yuan strength, but Bank of America and Deutsche Bank forecast a more conservative 6.7/USD in the next 12 months.
Broader Dollar Weakness
Jen remains a long-term dollar bear:
Estimates the USD is still 20% overvalued.
Bloomberg’s dollar gauge is down 8% YTD, heading for its worst year since 2017.
Outlook
While consensus calls for gradual yuan appreciation, Jen’s forecast is notably more aggressive. A move into the low-6s could reshape global trade dynamics, ease geopolitical frictions, and redirect investment flows back into Chinese assets.
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