Saturday, April 13th, 2019
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KUALA LUMPUR, April 13 ― Bursa Malaysia is likely to stage a technical rebound next week with the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) hovering at the 1,640 level. Phillip Capital Management Malaysia senior vice-president (investment)…
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KUALA LUMPUR: The ringgit is likely to trade at the current level of around 4.11 against the US dollar next week, supported by news on the revival of the East Coast Rail Link (ECRL) project.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the current resistance level of the ringgit was at 4.11 versus the greenback, whereby the next resistance level was at about 4.15.
“I suppose the ringgit would linger around the current resistance level of 4.11, as news on the ECRL should provide some impetus to the currency,“ he told Bernama.
The Prime Minister’s Office announced on Friday that the ECRL project would resume at a reduced cost of RM44 billion compared with RM65.5 billion previously, following the signing of a supplementary agreement between Malaysia Rail Link Sdn Bhd and China Communications Construction Company Ltd.
Meanwhile, FXTM research analyst Lukman Otunuga pointed out that further weakness for the ringgit-US dollar pair would see the local note re-test its year-to-date high of 4.14, as the level of 4.10 became the new support level.
He said with no major economic data releases in the week ahead, the spotlight would be mainly on external factors, particularly from the United States and China, that could drive the ringgit’s performance.
“US dollar bulls could be inspired by the country’s economic indicators released next week that surprise on the upside, which in turn may weigh negatively on Asian currencies.
“However, any data releases that appear to lower the bar on a US Federal Reserve’s interest rate cut, coupled with more dovish tones detected from Fed officials’ scheduled speeches next week, could result in a weaker greenback that alleviates pressure on riskier assets,“ he said.
On the impact from China, Otunuga said the country would announce its first quarter gross domestic product data, as well as last month’s industrial production and retail sales data, next week.
“Further signs of stabilisation in the world’s second largest economy could alleviate concerns surrounding global growth, and encourage more risk-on appetite among investors,“ he added.
For the week just ended, the ringgit traded mostly lower against the US dollar, and it hit a 10-week low of 4.1120/1160 versus the greenback on Thursday, mainly due to the disappointing data on February 2019 Industrial Production Index, which grew only 1.7%-on-year, as well as the downward revision of the global growth forecast by the International Monetary Fund.
On a Friday-to-Friday basis, the ringgit fell to 4.1120/1170 against the US dollar from 4.0870/0900 previously.
The ringgit also traded easier against other major currencies last week.
It retreated against the Singapore dollar to 3.0367/0406 from 3.0182/0207 previously, depreciated against the euro to 4.6519/6596 from 4.5889/5927 and decreased against the pound to 5.3760/3842 from 5.3458/3509.
Vis-a-vis the yen, the local note also weakened to 3.6744/6798 from 3.6583/6613. — Bernama
KUALA LUMPUR: Bursa Malaysia is likely to stage a technical rebound next week with the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) hovering at the 1,640 level.
Phillip Capital Management Malaysia senior vice-president (investment) Datuk Dr Mohd Nazri Khan Adam Khan said foreign selling was seen decreasing to about RM318 million this week from about RM417 million last week, signalling the possibility of fresh demand next week.
“The latest US Federal Reserve (Fed) hints about little need to change interest rates for all of 2019, will also help to lift interest,” he told Bernama.
However, he said the weakening ringgit may pose some cautious stance next week.
On Friday, the ringgit stood 4.1120/1170 against the US dollar amid lingering worries over the disappointing February Industrial Production Index (IPI) data along with the International Monetary Fund’s (IMF) recent downgrade of its global growth forecast.
The IMF trimmed global 2019 gross domestic product growth to 3.3% from its previous forecast of 3.5% made in January this year.
Meanwhile, Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said recent high frequency indicators such as the IPI and exports indicated that the Malaysian economy had slowed further in the first quarter of 2019.
“Hence we think investors’ appetite will remain timid next week.
“It seems there will be a technical rebound, though it appears to be elusive for now given the heightened uncertainties on the horizon,” he said.
He said the GDP was likely to grow 4.2% in the first quarter of this year.
“As such, corporate results in the US should give us more clue and conviction on the current market dynamics,” Mohd Afzanizam added.
He said the ongoing US-China and US-European Union trade frictions would also be the main key risk factors alongside the uncertainty over Brexit after the deadline was extended to Oct 31, 2019.
“While it may seem to be a relief, the UK political landscape is set to be on a roller-coaster. Talks of a possible general election and a second referendum could surface every now and then, in particular when the politicians are struggling to reach consensus.
“Major central banks such as the European Central Bank and the Fed are certainly become more dovish, paving the way for more accommodative monetary stance going forward,” he added.
On a Friday-to-Friday basis, the benchmark FBM KLCI settled 11.64 points lower at 1,630.17, with Bursa Malaysia being mostly in the red throughout the week.
The FBM Emas Index was 39.40 points lower at 11,561.46, the FBMT 100 Index decreased 51.66 points to 11,385.97 and the FBM Emas Syariah Index dropped 25.07 points to 11,762.39.
The FBM Ace Index narrowed 66.21 points to 4,729.40 but the FBM 70 advanced 53.95 points to 14,478.49,
Sector-wise, the Financial Services Index fell 66.65 points to 16,822.07 and the Industrial Products and Services Index decreased 1.41 points to 168.13, but the Plantation Index gained 32.79 points to 7,269.34.
Weekly turnover rose to 17.52 billion units worth RM11.47 billion from 13.89 billion units worth RM9.58 billion last Friday.
Main Market volume appreciated to 13.25 billion shares valued at RM10.53 billion from 10.36 billion shares valued at RM8.83 billion.
Warrant turnover rose to 2.37 billion units worth RM540.50 million from 1.95 billion units worth RM408.36 million.
The ACE Market volume was higher at 1.89 billion shares valued at RM396.55 million from 1.57 billion shares valued at RM329.20 million. — Bernama
KUALA LUMPUR, April 13 ― The ringgit is likely to trade at the current level of around 4.11 against the US dollar next week, supported by news on the revival of the East Coast Rail Link (ECRL) project. Bank Islam Malaysia Bhd chief economist Dr…
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