MONEY MASTER

Malaysia’s consumer stocks are poised for a rebound, supported by a stronger ringgit, according to Singular Asset Management , the country’s top-performing fund. Kok Lin Teoh, founder and chief investment officer, expects better margins for companies as the cost of importing raw materials becomes cheaper, boosting earnings growth in the next two to three years. Teoh, who manages about US$400 million (RM1.6 billion) across Asia-focused funds, is now shifting the focus of the Singular Value Fund towards domestic consumption-related stocks , including banks and consumer companies, to capitalize on local opportunities. “We are reducing our exposure to export-oriented industries because the ringgit has strengthened , and moving back into more domestic sectors,” he explained. After hitting a 26-year low , the ringgit has surged 14% in the three months leading up to September, outperforming other emerging market currencies. This, along with rising wages for civil servants and increased...

  The rally in Malaysia’s ringgit , which reached a three-year high this week, is expected to persist due to the nation’s favorable economic conditions and ongoing reforms, according to Bank Negara Malaysia (BNM) . “ Malaysia’s positive economic prospects and structural reforms , supported by initiatives to encourage capital flows, will continue to provide enduring support for the ringgit,” BNM said in an emailed response to Bloomberg News on Wednesday. Despite the 14% surge in the ringgit this quarter, making it the top performer among emerging markets, BNM officials are not overly concerned. The currency's strength has been buoyed by a rebound in exports and foreign inflows of about US$3.6 billion into Malaysian bonds and equities this quarter. The ringgit slipped slightly by 0.3% to 4.1427 per dollar on Thursday, after reaching a high of 4.1080 per dollar earlier in the week, its strongest level since June 2021 . Potential for a Pause in Gains Following the ringgit’s ...

  Asian currencies surged on Wednesday, with Malaysia's ringgit hitting its highest level in over three years, bolstered by China's stimulus measures aimed at revitalizing its economy. The People's Bank of China (PBOC) cut its medium-term loan rate following a broad policy easing package, sparking a rally across regional currencies and stocks. The ringgit , which has been the best-performing currency in Asia this year, appreciated by 0.7% against the US dollar, reaching 4.12 per dollar , its highest point since June 2021. The Indonesian rupiah and Philippine peso also posted strong gains, rising by 0.6% each. China's policy moves, which include support for its stock market and the ailing property sector , were seen as a significant step to address the economic slowdown . The MSCI's broadest index of Asia-Pacific shares rose 1.4%, reaching its highest level since February 2022, while the MSCI emerging markets currency index hit a record high. Indonesia is e...

Hong Leong Investment Bank (HLIB) has reduced its target price (TP) for Notion VTec Bhd to RM2.74 from RM3.28, despite the company reporting a decent earnings performance for the third quarter ended June 30, 2024 (3QFY2024). The downgrade is mainly attributed to the anticipated negative impact of a stronger ringgit against the US dollar on Notion VTec's future earnings. Key Points: Target Price Adjustment: HLIB maintains a 'buy' recommendation for Notion VTec but has lowered the price-earnings ratio valuation from 30 times to 25 times, reflecting concerns over subdued sentiment surrounding export-oriented companies due to the stronger ringgit. Notion VTec’s stock has already plunged 57% from its recent peak. Foreign Currency Exposure: The company has significant exposure to foreign currency risks, with 50% of its receivables in US dollars and 20% in euros. Approximately 90% of its sales are in these currencies. The appreciation of the ringgit is expected to result in foreig...

  Malaysian bonds are drawing significant unhedged foreign investments, leading to a strong rally in the ringgit, which is Asia's best-performing currency this year. In August, global funds invested RM8.1 billion in Malaysian government bills and bonds, the largest inflows since July 2023, driven by expectations of ringgit appreciation. Key Highlights: Surge in Unhedged Investments : The increased demand for Malaysian bonds has largely been unhedged, which means investors are not taking protective measures against currency fluctuations. This has amplified the ringgit's 6% gain in August as foreign funds flow into the country. Attractive Returns and Economic Outlook : An unhedged Bloomberg index of Malaysian bonds provided a total return of 9.74% for dollar-based investors this quarter, the highest in emerging Asia, compared to a 1.7% return for a hedged index. Malaysia's improving economic prospects, including stable inflation, adherence to fiscal deficit targets, and polit...

Analysts are optimistic about the outlook for Malaysian equities, pointing to a strengthening ringgit and attractive forward valuations as key factors that could drive further upside in the market, despite a recent increase in share prices. This follows a positive earnings season for the second quarter of 2024 (2Q2024), with many companies exceeding forecasts. Key Insights: Positive Market Outlook and Earnings Growth : Analysts expect the benchmark FTSE Bursa Malaysia KLCI (KLCI) index to close above 1,700 points by the end of 2024. PublicInvest Research has revised its year-end target for the KLCI to 1,750 points, up from 1,680, based on 2024 earnings forecasts. The revision follows strong earnings performance, with 80% of companies meeting or exceeding expectations in 2Q2024. The research house anticipates the earnings of Bursa Malaysia-listed companies to grow by 12.7% in 2024, up from a 11.6% forecast in the first quarter, and by 8.8% in 2025, compared to 8.2% previously. Impact of...

  The Malaysian Institute of Economic Research (MIER) has stated that the ringgit is currently undervalued but is fairly valued between 3.90 and 4.20 against the US dollar. This assessment comes after a period of underperformance by the ringgit, which was trading at 4.34 to the dollar at the time of the report. Key Insights: Fair Value Indicators : MIER’s valuation is supported by indicators such as the Nominal Effective Exchange Rate (NEER) and Real Effective Exchange Rate (REER), both of which suggest that the ringgit's fair value lies within the 3.90-4.20 range against the US dollar. Potential Impact of US Rate Cuts : The report highlights that a cumulative 100 basis points rate cut in the US federal funds rate in 2024 could narrow the interest rate differential between the US and Malaysia to 125-150 basis points. This could be favorable for the ringgit as investors might diversify their holdings in search of better returns. Supportive Domestic Factors : Domestic economic factor...

Asian markets saw a broad rally on Monday, with the Indonesian rupiah and Malaysian ringgit leading the gains, following Federal Reserve Chair Jerome Powell's indication that the U.S. central bank is likely to cut interest rates next month. Powell's comments at the Jackson Hole symposium have fueled investor optimism, driving emerging market currencies and stocks higher. Key Takeaways: Currency Strengthening : The Indonesian rupiah surged by as much as 1.3% against the U.S. dollar, reaching its highest level since September 2023. The Malaysian ringgit, which has been the region’s best-performing currency this year, gained 0.8%, hitting levels not seen since mid-February 2023. Stock Market Gains : In Indonesia, the Jakarta Composite Index rose by 0.9% to a record high, reflecting strong investor sentiment. Malaysia’s benchmark index also advanced, albeit modestly, by 0.1%. Powell’s Impact : Powell’s speech last Friday signaled a likely shift towards a rate cut in September, whic...

  The ringgit continued its uptrend on Wednesday, closing at a near 11-month high of RM4.58 against the US dollar, driven by the Bank of Japan’s (BOJ) decision to raise interest rates and the anticipation of a Federal Reserve interest rate cut in September. At 6pm, the ringgit soared 315 basis points to 4.5885/5925, compared to the greenback’s closing of 4.6200/6235 on Tuesday (July 30). UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan said the BOJ’s move signalled confidence in Japan’s economic recovery, which could bolster investor confidence in Asian currencies if the positive sentiment extends to global markets. “This will lead to a continued strengthening of the ringgit. Higher closing in the majority of Asian markets today is evidence that investors are now starting to move towards emerging markets in Asia,” he told Bernama. Mohd Sedek added that attractive interest rates in Japan might encourage investors to seek higher yields elsewhere, including i...

KUALA LUMPUR: Bank Negara Malaysia’s (BNM) international reserves fell RM8.3bil to RM356.4bil (US$94.5bil) over the past two weeks until Aug 14. BNM said on Thursday the international reserves as at Aug 14 was sufficient to finance 7.5 months of retained imports and it was 1.0 time the short-term external debt. The reserves had declined by RM8.3bil from the RM364.7bil (US$96.7bil) as at July 31, 2015. The reserves position then was sufficient to finance 7.6 months of retained imports and was 1.1 times the short-term external debt. The above news was taken from Bank Negara reserves decline to RM356B from The Star. The bad news is the reserves are still dropping, but at slower rate; although the Malaysian Ringgit continue to dive until 4.19 against the US Dollar before gaining back and close at 4.17 for the weekends. The slower rate of the reserves drop would most likely because there is no longer intervention by the Bank Negara against the Malaysian Ringgit devaluation ...

The Ringgit weakened against the USD and this trend seems to continue and show no sign of slowing down. USD against MYR currency A quick search on google will show you this and it's scary because the spike doesn't seem to slow down and there's no sign of it any time soon.  And to make matters worse, the BNM International Reserve as of July 2015 has shrunk below US$100 billion.  BNM International Reserves shrunk below US$100 billion To put into perspective, this is the first time that the reserve has fall below this level since August 2010.  The central bank gave a statement today and said the reserves' position is sufficient to finance 7.6 months of retained imports and is 1.1 times the short-term external debt.  The concern on the Ringgit currency is real as it has depreciated for 8 consecutive days.  The local currency slipped further today to 3.9265 against the US dollar — the lowest level in 17 years — compared with Thursday...