Weaker trading likely
BURSA Malaysia will likely trade lower this week, mainly due to the weakening ringgit amid heightened speculation of an interest rate increase by the US Federal Reserve (Fed) in December.
Affin Hwang Investment Bank vice-president/head of retail research Datuk Dr Nazri Khan Adam Khan said this week will be tough for the local bourse.
Factors that will pressure Bursa Malaysia include the weaker ringgit and lower commodity prices. “Furthermore, Fed chair Janet Yellen’s remarks have strengthened the possibility of an interest rate hike as soon as next month. This will pull ‘hot money’ out of ringgit bonds into US dollar bonds, he said.
However, Nazri Khan reiterated that this is only speculative money. “The real inflow of foreign funds will come in next year as a result of Prime Minister Datuk Seri Najib Abdul Razak’s visit to Beijing earlier this month. We believe this will neutralise the ringgit in the near term.” – Bernama