Sunday, September 10th, 2017
The U.S.’s biggest storm in the year – Irma has finally arrived. The Irma’s eye is moving over the Florida Keys, and Key West is seeing sustained winds of 71 mph and gusts of 90 mph, according to the latest USA National Hurricane Center reports. The Key West Weather Service Forecast Office reported a 91 mph gust. Maggie Howes, a first responder in Key Haven, is hunkered down right now as Irma moves through the Florida Keys. “It’s the worst storm I’ve have been through myself personally,” she told CNNRead More
PETALING JAYA: The ringgit’s upward trend is expected to continue till year-end, increasing the likelihood of it breaching the RM4.00 to US$1 psychological mark sooner rather than later after it broke the 4.20 level last Friday, said Sunway University Business School Professor of Economics Prof Dr Yeah Kim Leng.
“The ringgit’s performance is in line with Malaysia’s strengthening economy and also some under valuation of the currency. I see it inching towards fair value,” he told SunBiz.
Yeah, who expects the ringgit to settle at RM4.10 to RM4.20 at year-end, said the currency could possibly retrace quickly if positive factors remain.
The ringgit, which saw a huge appreciation last week, broke the 4.20 level to RM4.1960 against the US dollar as at 5pm last Friday with a 0.34% gain, reaching the highest level in the past 10 months. Year to date, the ringgit has risen 6.48% against the greenback.
Yeah said the ringgit’s current performance is due to improving fundamentals and a surge in exports.
“There was also a slight widening of the current account surplus and rising foreign reserves, which stood at US$100.5 billion as at end of August. More importantly, there has been sustained strength in global demand where major economies are showing firmer growth. I expect Malaysia’s exports to sustain their current strength,” he added.
Yeah said the Purchasing Managers’ Index suggests that global demand is likely to continue growing while China has been performing above expectations with higher imports from the rest of Asia, including Malaysia, which saw higher exports to China.
He said the ringgit, which suffered a major correction in 2015 when oil prices plunged, should be retracing some of its undervaluation and expects the currency to continue improving as long as the economy performs well.
However, Yeah cautioned that currency forecasts are subject to margins of error and conditions can change, depending on global events.
“There could be knee-jerk reactions to geopolitical events, for example the North Korea problems. These events could result in flight to safety and easily derail the currency’s performance,” he said.
Meanwhile, Inter-Pacific Research Sdn Bhd head of research Pong Teng Siew said the main reason for the ringgit’s strengthening is the general weakness of the US dollar, which is the same factor behind the performance of other Asian currencies.
“The US dollar has been weakening for one to two months already and the Euro has been strengthening against the US dollar in a major way. The European Central Bank’s QE (ECB’s quantitative easing) programme has kept the euro weak but it is now approaching the end of the QE programme. The programme is supposed to end at year-end and with about three months left till year-end, the euro is strengthening,” he said.
Pong said most Asian currencies are tracking the middle path between US dollar and euro, and are expected to weaken against the euro but strengthen against the US dollar.
“The euro will keep strengthening against the US dollar and Asian currencies will follow suit. However, the European Central Bank is expected to have one more meeting in October and it will be one more opportunity for them to say whether they will continue with the QE programme,” he said.
Pong declined to give a projection of the ringgit’s performance for the rest of the year, saying that it would depend on the outcome of the ECB’s meeting next month.
KUALA LUMPUR: The Malaysian Timber Council (MTC) is targeting to achieve RM44 million in sales at the China International Furniture Expo (Furniture China), based on the sales success of its industry partners in the last two years.
This year, the exhibition will be held from Sept 12 to 15 at the Shanghai New International Expo Centre (SNIEC) in Pudong, Shanghai.
Last year, exhibitors recorded both confirmed and potential sales of RM40.03 million, and this is the third year that MTC is organising a group participation to Furniture China.
In 2016, exports of Malayia’s timber and timber-based products to China rose 3.7% to RM846.8 million.
Furniture remains the main export of Malaysian timber products to China in value terms, amounting to RM121.7 million which marked a 91% increase from the previous year. – Bernama
MERSING: Mersing Harbour Centre, a RM12 million business hub for small and medium enterprises (SMEs), was officially opened yesterday by the Sultan of Johor, Sultan Ibrahim Sultan Iskandar in conjunction with the Kembara Mahkota Johor 2017.
The centre will house 50 SMEs including participants of the East Coast Economic Region Development Council (ECERDC) Empower Programme.
It will also be equipped with a car park, tourist information counter, exhibition hall, surau, children playground and other amenities for the convenience of tourists and locals.
The project was undertaken by ECERDC in collaboration with the state government in January 2016 to upgrade the socio-economic status of the people especially those under the B40 category, said CEO Datuk Seri Jebasingam Issace John.
B40 refers to those earning a salary of RM3,855 and below.
Statistics compiled by ECERDC revealed that Mersing, the only district in Johor that participated in the ECER, had drawn private sector investments, worth RM1.61 billion, as of July, and created job opportunities for 1,710 locals. – Bernama
Malaysian palm oil futures jumped around two per cent, tracking a six-month high on optimism for the European Union’s (EU) anti-dumping vote and supported by gains in rival oils on the Chicago Board of Trade (CBOT) and China’s Dalian Commodity Exchange. The benchmark crude palm oil futures (FCPO) contract increased 2.22 per cent to RM2,766 […]
SHANGHAI, Sept 10 — As a flood of unregulated cash swirls through the Chinese economy, Beijing has been taking aim at the trust companies whose unrestrained lending practices are worrying regulators. The trusts, at the heart of a vast shadow…
The Index rose 0.303 per cent to end the week at 155.058 points from 154.590 points last week. The entire MGS yield curve dropped 2bps to 10bps except the 30-year region, which went up by 1bp. The bullish sentiment was supported by foreign buying as the Malaysian ringgit also strengthened to 4.1960 against the greenback […]
PETALING JAYA: Analysts foresee that Bank Negara Malaysia (BNM) would likely keep the Overnight Policy Rate (OPR) unchanged for the rest of the year, following a largely expected decision for the Monetary Policy Committee to leave it at 3% last Thursday.
In a report last Friday, Kenanga Research said it believes that inflation would likely remain manageable and gradually taper off towards year end, despite the possible tightness in global oil supplies and improved domestic demand.
“With just one more scheduled monetary policy meeting for the year in November, we do not see any striking reasons to alter the current 3% OPR for the rest of the year as inflation is likely to have peaked in March,” it said.
On a separate note, AmBank Research reiterated its base case view of no rate hike this year, as BNM will continue to weigh between growth prospects and inflation.
“With the ringgit expected to stay healthy as our fair value is between 4.12 – 4.15 against the US dollar, our full-year average outlook is at 4.33.”
Therefore, it said room for ringgit to stay firm remains, suggesting it should help ease pressure from import cost and limit the risk of potential transfer pricing.
Nonetheless, PublicInvest Research pointed that demand-driven inflation could rise given the strong first half of 2017 (1H17) growth, leading it to be slightly cautious for the remainder of the year over the central bank’s policy outlook.
The research house projected 2H17 inflation to average at 3.5% against 1H17’s average of 4.1%, while core inflation is expected to inch-up slightly to 2.7% in 2H17 against the 2.6% in 1H17.
“The absence of exogeneous shocks and negligible demand-driven inflation suggests that OPR may be left at 3% for the remainder of 2017, which we cautiously expect. BNM may put a growth mandate as its main priority for now.”
On the other hand, Malaysian Rating Corp Bhd (MARC) said it believes that the third quarter economic performance will be key to BNM’s future rate hike decision.
Its chief economist Nor Zahidi Alias reiterated that if the economy’s performance continues to beat expectations in the rest of the year, the chances of a rate hike will be higher.
“However, we believe BNM will also take into account rising geopolitical risks before making its decision,” he added.
In addition, Nor Zahidi said the rating agency is of view that the central bank will not rush to push up rates due to several reasons unless the third quarter economic performance continues to beat expectations.
“First, inflation in 1H17 has been largely driven by cost factor. In particular, the rise in petrol prices (RON95) explains the major increase in inflation in 1H17. The price of RON95 bottomed out in March 2016 at RM1.60 per litre and has been on the rise since then.
“Not surprisingly, consumer price index (CPI) growth hit a peak of 5.1% in March 2017. On the other hand, demand-driven factors remain benign, judging by the trend of core CPI which remained stable at an average of 2.5% in the year-to-date. This suggests the lack of a widespread upward price pressure in the economy.”
Going forward, MARC expects the headline inflation rate to moderate and will average circa 3.5% in 2017 according to its estimate.
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