Bursa rises:
Market also expecting stimulus measures in China
Investors watch trading boards at a private stock market gallery in Kuala Lumpur. Bursa Malaysia joined an uptrend in most regional markets ahead of the third interest rate hike by the US Federal Reserve for this year.
PETALING JAYA: Bursa Malaysia joined an uptrend in most regional markets ahead of the third interest rate hike by the United States Federal Reserve (Fed) for this year, as well as expectations of stimulus measures in China in light of the trade tension.
On Tuesday, the Fed began a two-day policy meeting with Despite concerns that trade tensions between China and the US would dampen Asia’s economic growth in the coming years, Bursa Malaysia saw the largest weekly foreign net inflow amounting to RM514.8mil last week.
The market is targeting the Fed to raise its benchmark interest rate to between 2% and 2.25% in its ninth increase since late 2015.
Another rate increase is expected to take place in the later part of the year and more in 2019. Fed chairman Jerome Powell is also expected to share the economic projection, moving forward.
“The market has already priced in the interest rate hike by the Fed. However, traders are keeping an eye on the Fed’s economic projection for 2019,” an analyst said.
Bursa Malaysia, tracked by the benchmark FBM KLCI, was among Asian gainers yesterday, closing the day higher by 4.25 points or 0.24% to 1,798.72 with 469 gainers and 387 counters finishing lower.
While the market was broadly positive, the jump in Axiata Group Bhd’s share price by 19 sen to RM4.75 added over three points to the FBM KLCI.
Other leading gainers include Tenaga Nasional Bhd that added 34 sen to RM15.50.
CIMB Group Holdings Bhd seemed to have shed the negative sentiment surrounding the resignation of its chairman, rebounding four sen to RM6.04.
Counters that attracted heavy investor interest included VS Industry Bhd, which jumped 11 sen to RM1.73 while Hibiscus Petroleum Bhd gained five sen to RM1.23.
Regional markets were generally lifted by a bounce in Chinese equity, as investors banked on Beijing expanding its stimulus measures to prop up its economy in light of the trade tensions.
The Shanghai Composite Index was up 0.9% to 2,806.81, the CSI 300 rose 1.11% to 3,417.24 and Hong Kong’s Hang Seng gained 1.15% to 27,816.87 points.
Japan’s Nikkei closed 0.4% higher at 24,033.79, while South Korea’s Kospi added 0.68% to 2,339.17.
Despite concerns that trade tensions between China and the US would dampen Asia’s economic growth in the coming years, Bursa Malaysia saw the largest weekly foreign net inflow amounting to RM514.8mil last week.
“It was the largest weekly foreign net inflow recorded in 22 weeks,” said MIDF Research.
“In fact, Malaysia attracted the biggest weekly foreign net inflow amongst the Asean markets (Thailand, the Philippines and Indonesia) we monitor,” it added.
Nonetheless, on a year-to-date basis, foreign net outflow from Bursa as of last Friday stood at RM8.7bil.
On the ringgit, the local currency traded 0.1% lower against the US dollar yesterday at 4.1413.
The ringgit weakened 0.3% against the pound sterling at 5.4538 and 0.15% against the Singapore dollar at 3.0336.
The key events to look out for are the 11th Malaysia Plan mid-term review on Oct 18 and Budget 2019 on Nov 2, which would be a crucial piece of policy document.
The budget announcement would be the first under the Pakatan Harapan government.