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KUALA LUMPUR – The ringgit opened higher against the US dollar on Friday, buoyed by the increase in the overnight policy rate (OPR) to 3%, but the ringgit-dollar pair is projected to trade in a narrow range as risk-off mode leads to increased demand for the greenback.
At 9am, the local note rose to 4.4350/4400 versus the US dollar from Wednesday’s closing rate of 4.4525/4580.
Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid said there seemed to be risk-off mode taking hold in the markets at this time; nonetheless, the unexpected move by Bank Negara Malaysia’s (BNM) Monetary Policy Committee to increase the OPR had lifted the ringgit.
“However, as we expect BNM to stop the OPR revision cycle, spillover from the OPR hike seems limited. On that note, the ringgit should stay guarded as market participants are weighing the possibility of a pause by the US Federal Reserve and the weakening global growth outlook,” he said.
He also explained that key US data points such as nonfarm payrolls would closely be monitored tonight as the Fed seemed to acknowledge the softening trend in the US labour market.
Meanwhile, the ringgit traded lower against a basket of major currencies.
It depreciated against the Japanese yen to 3.3067/3110 from 3.2833/2876 on Wednesday, was easier vis-a-vis the British pound at 5.5814/5877 versus 5.5727/5796 previously, and fell against the euro to 4.8896/8951 from 4.9156/9216 at the last close.
The local note traded mixed against Asean currencies.
It improved further against the Philippine peso to 8.00/8.03 from 8.04/8.05 at Wednesday’s close, appreciated versus the Indonesian rupiah to 301.9/302.4 from 303.3/303.5 previously, was marginally lower against the Singapore dollar at 3.3426/3469 compared with 3.3420/3463, and fell vis-a-vis the Thai baht to 13.1298/1497 from 13.0817/1037.
The market was closed yesterday in conjunction with the Wesak Day holiday.
Bursa Malaysia opened lower today, tracking the weaker Wall Street performance overnight amid fears over the ongoing banking crisis in the United States.
At 9.07am, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 3.20 points to 1,422.79 from Wednesday’s close of 1,425.99.
The benchmark index opened 2.38 points lower at 1,423.61.
The market breadth was negative with decliners outnumbering gainers 161 to 119, while 258 counters were unchanged, 1,695 untraded, and 11 others suspended.
Turnover stood at 190.56 million units worth RM64.17 million.
Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said Wall Street finished lower for the fourth consecutive day on renewed banking fears.
The Dow Jones Industrial Average fell by 0.86% (286 points) while Nasdaq shed 0.49% (58.93 points).
Over in Hong Kong, stocks ended higher as investors cheered the prospect of an imminent pause in interest-rate hikes.
On the domestic front, Thong said the FBM KLCI closed in negative territory as BNM had unexpectedly raised the OPR.
“We believe the local market will see some headwinds, particularly the banking and property stocks, following BNM’s monetary tightening measure although bargain-hunting activities may emerge as well.
“Hence, we anticipate the benchmark index to trend sideways within the range of 1,420-1,430 points today,” Thong said.
Of the heavyweight counters, Maybank was down two sen to RM8.70, Public Bank and CIMB were flat at RM3.91 and RM5.07 respectively, Petronas Chemicals slid six sen to RM7.18, CelcomDigi eased three sen to RM4.41, and Tenaga rose one sen to RM8.99.
Among the actives, KNM and Bahvest added one sen each to six sen and 22.5 sen respectively, and Revenue Group ticked up two sen to RM3.70, while Jade Marvel and MYEG gained half-a-sen to 28.5 sen and 82.5 sen respectively.
On the index board, the FBM Emas Index trimmed 22.44 points to 10,425.68 the FBMT 100 Index slipped 22.80 points to 10,117.32, and the FBM Emas Shariah Index reduced 27.53 points to 10,758.95.
The FBM ACE Index was 6.16 points lower at 5,207.14 and the FBM 70 index erased 30.90 points to 13,524.21.
Sector-wise, the Industrial Products and Services Index edged down 0.75 point to 170.70, the Financial Services Index dropped 6.41 points to 15,582.38, the Energy Index eased 3.98 points to 829.50, and the Plantation Index fell 39.47 points to 6,787.14. – Bernama, May 5, 2023