According to specialists, the recent market trends in Malaysia can be attributed to a combination of factors, including the composition of the Cabinet and the call to order of Parliament for the reintroduction of Budget 2023. This political decision is expected to open the door for pro-growth measures and domestic reforms, which could have a positive impact on the local currency. Research from UOB suggests that additional Overnight Policy Rate (OPR) increases are among the domestic triggers for the ringgit.
The ringgit increased its advances and reached a three-month high on Friday, trading at 4.4760, up 0.43% against the US dollar at 5 pm. However, Bursa Malaysia finished 1% lower, with losers outnumbering gainers 629 to 347, and 362 counters remaining unchanged. The total turnover was 4.4 billion shares worth RM2.75 billion. After six days of net outflows, foreign investors bought RM341 million worth of stocks, according to statistics from Bursa Malaysia.
Market Performance
The market performance was mixed, with some stocks experiencing significant losses. Nestle dropped RM1.10 to RM130.40 on Bursa Malaysia, while Malaysian Pacific Industries fell 44 sen to RM27.40. PPB eased 36 sen to RM16.20, and Dutch Lady fell 28 sen to RM31.10. On the other hand, some stocks experienced gains, with Hong Leong Industries increasing from 18 sen to RM9.40, and Hextar Technologies increasing from 62 to RM13.60. Computer Forms also increased from 41 to RM1.90, and Malaysia Airports increased from 21 to RM6.35.
The regional market performance was also mixed, with the most extensive MSCI index of Asia-Pacific stocks outside Japan decreasing by around 0.2%. The Nikkei 225 in Japan, the Hang Seng in Hong Kong, the Kospi in South Korea, and the Straits Times Index in Singapore all ended the day lower. This suggests that the market trends in Malaysia are not isolated and are influenced by regional and global factors.
Domestic Triggers
According to research from UOB, additional OPR increases are among the domestic triggers for the ringgit. This suggests that the monetary policy decisions made by the central bank could have a significant impact on the local currency. The call to order of Parliament for the reintroduction of Budget 2023 is also expected to have a positive impact on the economy, as it could lead to pro-growth measures and domestic reforms.
The 10th Prime Minister, Datuk Seri Anwar Ibrahim, has declared Monday, November 28, 2022, to be a special public holiday. This decision is expected to have a positive impact on the economy, as it could boost consumer spending and tourism. However, the impact of this decision on the market trends is still uncertain and will depend on various factors, including the response of foreign investors and the overall economic conditions.
Looking Ahead
As the market trends in Malaysia continue to evolve, it is essential to keep a close eye on the domestic and regional factors that could influence the economy. The composition of the Cabinet and the call to order of Parliament for the reintroduction of Budget 2023 are expected to have a significant impact on the local currency and the overall economy. Additionally, the monetary policy decisions made by the central bank and the response of foreign investors will also play a crucial role in shaping the market trends. As such, investors and analysts will be watching closely to see how these factors unfold and what impact they will have on the Malaysian economy in the coming days and weeks.
