Stocks, ring­git dive on Trump’s shock win

> Bank Ne­gara Malaysia mon­i­tor­ing sit­u­a­tion and will en­sure am­ple liq­uid­ity to sup­port or­derly mar­ket

The Sun (Malaysia) - - SPEAK UP - BY LEE WENG KHUEN

PE­TAL­ING JAYA: Don­ald Trump’s vic­tory in the US pres­i­den­tial elec­tion jolted global as well as the Malaysian mar­kets yes­ter­day, with Bursa Malaysia’s FBM KLCI nose­div­ing as much as 23.48 points or 1.41%, to 1,640.34 points at one point.

At the close, the lo­cal stock mar­ket barom­e­ter was down 16.20 points or 0.97% to 1,647.62. Over­all, losers led gain­ers by 807 to 165. To­tal vol­ume was 2.51 bil­lion shares worth RM2.39 bil­lion.

On the cur­rency front, the ring­git weak­ened 0.94% to an in­tra-day low of 4.2410 against the US dol­lar. As at 5pm yes­ter­day, it traded at 4.2330, Bloomberg data showed.

In view of the volatil­ity, Bank Ne­gara Malaysia is­sued a state­ment yes­ter­day say­ing that it is closely mon­i­tor­ing the sit­u­a­tion and will en­sure liq­uid­ity re­mains am­ple to sup­port an or­derly mar­ket.

“The Fi­nan­cial Mar­kets Com­mit­tee is also in com­mu­ni­ca­tion with its mem­bers and will en­sure that all busi­ness and trans­ac­tion needs are to be met by the fi­nan­cial mar­kets as re­quired,” the cen­tral bank noted.

Economists be­lieve the weak­en­ing of the ring­git is just a knee-jerk re­ac­tion and it is ex­pected to hover around the cur­rent level of 4.20.

“Un­less there is pos­i­tive news from the gov­ern­ment, then it can push up the ring­git. At the mo­ment, we see the ring­git will re­main at the cur­rent level and it won’t fall to 4.3 or 4.4,” said Al­lianceDBS Re­search economist Manokaran Mot­tain.

In the worst-case sce­nario, RHB Re­search economist Peck Boon Soon ex­pects the ring­git will weaken to only 4.3 de­spite hav­ing down­side risk.

The mar­ket un­cer­tainty, how­ever, prompted in­vestors to look for safe­haven gold, which saw its big­gest rally since Brexit. Its price surged nearly 5% to US$1,337.4 per ounce.

Schroder In­vest­ment Man­age­ment (Sin­ga­pore) Ltd chief economist and strate­gist Keith Wade said the best bet is that safe-haven cur­ren­cies such as the yen and Swiss franc are likely to be in de­mand and in­vestors are also likely to favour gold.

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