Finance, construction remain key drivers for property sector

KUCHING: The financial and construction sectors remain key drivers to Malaysia’s property sector outlook, says Kenanga Investment Bank Bhd (Kenanga Research), as higher business risk profiles should be commensurated by higher return on equities (ROEs). “We view the financial sector as key driver of the property sector as most house purchases are financed by home […]

Ringgit rebounds to close slightly higher against US dollar

KUALA LUMPUR: The ringgit rebounded to close slightly higher against the US dollar today, as the greenback retreated from an 11-month high on profit-taking after a recent rally, dealers said.

At 6pm, the ringgit was quoted at 4.0010/0040 against the greenback compared with Thursday's close of 4.0140/0170.

A dealer said the local currency was marginally higher by about 0.31%, in tandem with the slight weakening of the dollar index by 0.26%.

“The movement of the local currency was also in tandem with a slight improvement on Bursa Malaysia which closed higher, bucking the regional trend on positive local news,” he said.

Prime Minister Tun Dr Mahathir Mohamad's comment that he sees the fair value of the ringgit at RM3.80 against the US dollar helped lift the local currency, he said.

On another note, he added the announcement of Datuk Nor Shamsiah Mohd Yunus as the new Governor of Bank Negara Malaysia (BNM) today, for a term of five years effective from July 1, 2018, was also seen as a positive as she is a very capable figure with in-depth knowledge and experience in BNM.

The local unit was traded mostly lower against a basket of currencies, except the Japanese yen.

It fell against the Singapore dollar to 2.9484/9511 from Thursday's close of 2.9461/9493 and decreased against the British pound to 5.3189/3245 versus 5.2620/2675.

The ringgit fell against the euro to 4.6644/6683 from 4.6233/6276 on Thursday, but improved vis-a-vis the Japanese yen to 3.6323/6360 from 3.6355/6386 yesterday. — Bernama

BNM to continue operating as an independent body: Guan Eng

PUTRAJAYA: Bank Negara Malaysia (BNM) will continue to operate as an independent body according to the rules set out in the legislation, said Finance Minister Lim Guan Eng.

“This is a government that operates under the rule of law. We will respect the present role as outlined under the present laws,” he said.

Lim said this when asked whether BNM would now come under the purview of the Finance Ministry, given that the announcement on the new Governor was made by him, or would remain as an independent body.

“I am just making the announcement (of the appointment). The announcement can be made in a press statement or at a press conference. So, (by having a press conference) we are (also) letting everyone see the new BNM Governor in person,” he said after announcing the appointment here today.

“The announcement is made following several earlier news reports…. It seems there have been many news leaks, which is why we are making the announcement this afternoon.

Nor Shamsiah's appointment is for a term of five years effective from July 1, 2018, to June 30, 2023.

She takes over from Tan Sri Muhammad Ibrahim, who resigned earlier this month before completing his five-year term after questions were raised on a RM2 billion land purchase deal between the central bank and the Finance Ministry. Muhammad was appointed in May 2016.

Lim said Nor Shamsiah was appointed as she was a capable woman who inspired confidence at the international level.

Meanwhile, Nor Shamsiah thanked the Prime Minister and the government for the opportunity to serve the nation.

“It is with an utmost sense of honour and responsibility that I accept this appointment. I will endeavour to carry out the duties of the Governor of BNM to the best of my ability together with the present team.

“BNM will continue to focus on delivering its mandate of maintaining monetary and financial stability in the best interest of the nation,” she said.

Asked on her priority as the new Governor, Nor Shamsiah said it was too early to tell as she had been “away” from BNM for nearly two years.

“I will need to go back and discuss with the staff on the current situation and what would be the priorities moving forward,” she added. — Bernama

New BNM governor appointment lifts Bursa Malaysia at close

KUALA LUMPUR, June 22 — Bursa Malaysia closed higher today as investors reacted positively to the appointment of the new Bank Negara Malaysia (BNM) Governor, Datuk Nor Shamsiah Mohd Yunus. A dealer said with Nor Shamsiah’s vast experience in the…

BNM international reserves down 0.6% to US$107.9b as at June 14

PETALING JAYA: Bank Negara Malaysia's (BNM) international reserves amounted to US$107.9 billion (RM431.9 billion) as at June 14, 2018.

This represents a decline of 0.6% compared with the US$108.5 billion recorded as at May 31, 2018.

The central bank said the reserves position is sufficient to finance 7.5 months of retained imports and is 1.0 time the short-term external debt.

The credit trap of paying the monthly minimum

It may be tempting to just pay the monthly minimum due on your credit card statement. After all, it helps with your cash flow. Unfortunately there are consequences of paying just the minimum each month – you will incur interest charges and it will take you longer to settle your outstanding balance. The result? Huge […]

Malaysia to face continued selling pressure in coming months

KUCHING: Analysts have projected that Malaysia will face continued selling pressure in the coming months following rising concerns that credit rating agencies would put Malaysia on ratings watch due to the new government’s decision to cancel large scale infrastructure projects. According to the research arm of Kenanga Investment Bank Bhd (Kenanga Research), foreigners were net […]

Foreign holdings of Malaysian bonds at eight-year low

PETALING JAYA: Foreign holdings of Malaysian bonds fell to an eight-year low last month and selling pressure is expected to continue in the coming months, said Kenanga Research.

It said in a report today that the expected selling pressure is on the back of rising concerns that credit rating agencies would put Malaysia on ratings watch due to the new government's decision to cancel large scale infrastructure projects.

“The implementation of fuel subsidies and the removal of the Goods and Services Tax, which could weigh on the government's ability to meet its fiscal target, are adding pressure to sentiments.

“Additionally, the sudden resignation of Bank Negara Malaysia's (BNM) governor and the changes in several government-linked corporate heads are also expected to add uncertainty to the domestic bond market,” it said.

On the external side, rising expectations of an interest rate increase by the US Federal Reserve are seen weighing on regional bond markets. Note that the average Indonesian 10-year bond yield jumped to 7.18% in May while India's average 10-year bond yield has climbed to 7.78%.

Foreigners were net sellers of Malaysian debt securities for the second month in May, with RM12.9 billion sold. This marks the biggest drop in 14 months or since the record RM26.2 billion fall in March 2017.

“The outflow slashed foreign holdings share in Malaysian debt securities to the lowest in eight years (since June 2010) to 14.2%,” said Kenanga Research.

It said investor sentiments were rattled by the unprecedented outcome of the 14th general election and the subsequent news flow on Pakatan Harapan's policy decisions.

“External factors were also less encouraging as the US growth indicators point north, suggesting a more hawkish US Fed. Along with rising global trade tensions, demand for emerging market's bonds as a whole weakened in May,” it added.

Kenanga Research said the sell-off in May was broad based, across both short-dated and long-dated securities.

Short-dated securities registered the largest outflow in 14 months of RM2.3 billion. The 26.1% decline in foreign fund flows led to foreign holdings of total short-dated Malaysian bonds sliding to 53.9%.

Foreign holdings of long-dated securities (Malaysian government securities/MGS and government investment issue/GII) recorded the largest outflow in 14 months, at RM9.8 billion. As a result, its share slid to 25.9% of total long-dated debt, a 14-month low.

“Consequently, the average local benchmark 10-year MGS bond yields surged to 4.17% in May. Meanwhile, the average yield gap between the benchmark US 10-year Treasury yields and the local 10-year MGS bond yields widened to 120 basis points from 116 basis points the preceding month,” Kenanga Research said.

On the brighter side, the issue of the new benchmark 20-year MGS drew good demand, signalling investors' confidence in the long-term outlook of the local bond market.

Kenanga Research expects a gradual relaxation of the foreign exchange administration rules that were implemented during the former BNM governor's time, to lure foreign capital. Hence, it retained its view on capital flight, which is expected to continue in 2H18 before capital flows stabilise.

“As such, we remain optimistic of the long-term capital flow outlook which would provide BNM the flexibility to retain its Overnight Policy Rate at 3.25% to accommodate growth and meet its 5.5-6% economic growth target for this year,” it said.

BNM reserves at US$108.5b on May 31

PETALING JAYA: The international reserves of Bank Negara Malaysia amounted to US$108.5 billion (RM431 billion) as at May 31, 0.82% lower than the US$109.4 billion as at May 15.

The reserves position is sufficient to finance 7.6 months of retained imports and is 1.1 times the short-term external debt.

Bank Negara’s international reserves down 0.8% to US$108.5b as at May 31


KUALA LUMPUR (June 7): Bank Negara Malaysia’s (BNM) international reserves fell by a marginal 0.82% to US$108.5 billion as at May 31, from US$109.4 billion as at May 15. In a statement today, the central bank said the reserves position is sufficient to finance 7.6 months of retained imports and is 1.1 times the short-term external debt. The foreign currency reserves, which made up the biggest part of the reserves, dipped to US$102.1 billion, against US$102.8 billion on May 15. Its International Monetary Fund reserves stood at US$800 million, whileRead More