Central Banks Loosening Their Grip on Markets
Fund managers say good time to buy shares as ringgit weak
Oil output cut: M'sia to gain in form of lower depletion rate
BY GOH THEAN HOWE
KUALA LUMPUR: NON-Organisation of the Petroleum Exporting Countries (Opec) producers, including Malaysia, will stand to gain from the recent agreement by the cartel to cut production. “Malaysia’s oil and gas (O&G) sector, including the supporting industries, will benefit from higher oil prices even with a lower production volume. The net impact depends on the relative volume or prices,” Sunway University Business School economics professor Dr Yeah Kim Leng told Business Times yesterday. Malaysia and 10 other non-Opec producers agreed on Saturday to cut their oil output with the aim of ending the crude glut and reversing the fall in income, following the Opec agreement. He added that Malaysia would benefit from the Opec move despite having to cut production. “Let’s say Malaysia agrees to a five per cent production cut. But if the oil price is five per cent higher, its export earnings will remain the same or even slightly higher. “If there is a loss in revenue, the long-term gain will come in the form of lower depletion rate,” said Yeah. Public Investment Bank Bhd analyst Mabel Tan concurred with Yeah’s view. “We believe oil prices will see some stabilisation at the current US$50 (RM220.76) per barrel level next year, supported by demand and supply fundamentals. “At this stabilised level, capital expenditure spending should restart and, thus, spur activity for the sector,” said Tan in a research report. Brent crude oil prices traded at more than US$55 per barrel yesterday, their highest since July last year, following the announcement of production cut by non-Opec members on Saturday. The research house has an “overweight” recommendation on the oil and gas (O&G) sector with an unchanged estimation of US$50 per barrel. “We concede that despite oil prices possibly remaining pressured, we are seeing the end of the lower oil price cycle as well, based on historical trend and a recovery ahead. Thus, we are revising our recommendation to ‘overweight’ on the O&G sector,” said Tan. SapuraKencana Petroleum Bhd, Wah Seong Corporation Bhd and Bumi Armada Bhd are among the top picks for the research house. On November 30, Opec members, which produce around 40 per cent of the world’s crude, announced their intention to cut output by 1.2 million barrels per day beginning January 1 to 32.5 million bpd. Under that deal, Opec called on non-member producer countries to lower their output by 600,000 bpd. The 11 countries that agreed to cut a total of 558,000 bpd are Russia, Kazakhstan, Mexico, Oman, Azerbaijan, Malaysia, Bahrain, Equatorial Guinea, Sudan, South Sudan and Brunei.
Source: New Straits Times
Bank Negara's international reserves at RM399.6 billion
BY NST ONLINE
KUALA LUMPUR: Bank Negara Malaysia’s international reserves amounted to RM399.6 billion (equivalent to US$96.4 billion) as at November 30 this year. The lower international reserves position reflected the liquidity support in the foreign exchange market, the central bank said in a statement today. The reserves position is sufficient to finance 8.3 months of retained imports and is 1.2 times the short-term external debt. The reserves previously stood at RM407.8 billion (equivalent to US$98.3 billion) as at Nov 15 compared to RM405.5 billion (equivalent to US$97.8 billion) as at Oct 31.
Source: New Straits Times
Malaysia to set up tech trade hub in UK next year
Yasmin Mahmood speaks at a forum organised by Google Malaysia in Kuala Lumpur July 18, 2016. — Picture by Saw Siow Feng
KUALA LUMPUR, Dec 7 — Malaysia is working to set up a tech trade hub in the UK, its second largest technology investor, by early 2017 to focus on digital businesses.
Malaysian officials from the Malaysian Digital Economy Corporation (MDEC) are currently on a tour in the UK, signing Memorandum of Understanding (MoUs) with some cyber security groups there, The Telegraph reported.
MDEC CEO Datuk Yasmin Mahmood reportedly said that British firms have shown a lot more hunger since the referendum last June when Britons voted to leave the European Union.
“We do find that since the Brexit vote there is a lot more hunger, more interest in the other potential markets,” she was quoted saying.
“British firms have the potential to come into a leadership position in this geography (Malaysia and Southeast Asia).
“We were already working towards this before the vote, but now there is more receptivity from people who have not thought about Malaysia in the past.”
Among the MoUs signed were with PGI Cyber Academy in Bristol to provide training and consulting services in Malaysia; the University of Salford to work on technological research and development, and an exchange partnership with the Future Cities Catapult in London.
The London office will be only be MDEC’s second overseas office after one in Silicon Valley.
Source: Malay Mail
Less volatility in ringgit forex rate
Bursa Malaysia opens higher despite pessimistic investors
An investor monitors share market prices at a brokerage firm in Kuala Lumpur, Malaysia, August 24, 2015. — Reuters pic
KUALA LUMPUR, Dec 5 — Bursa Malaysia opened higher today despite investors being pessimistic over the market’s performance, dealers said.
At 9.04am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) was up 1.11 points to 1,630.07 from last Friday’s close of 1,628.96.
The index opened 1.6 points higher at 1,630.56.
On the broader market, gainers led losers 85 to 50, while 125 counters remained unchanged, with 1,436 untraded and 21 others suspended.
Turnover stood at 38.47 million shares worth RM13.08 million.
Public Investment Bank Bhd said in a note that the FBM KLCI was set to open lower today after Wall Street ended last week on a hesitant note.
“Treasury bond prices rallied and the Dollar retreated, as participants digested the latest US jobs report and looked ahead to Italy’s constitutional referendum on Sunday,” it said.
Meanwhile, RHB Research in separate note advised traders to maintain short positions, below the 1,636-point level.
The FBM Emas Index rose 7.64 points to 11,406.81, the FBMT100 Index edged up 7.62 points to 11,138.65, and the FBM Emas Shariah Index increased 12.98 points to 11,939.12.
The FBM 70 was up 9.14 points to 13,085.55 and the FBM Ace gained 6.05 points to 4,784.62.
Sector-wise, the Plantation Index was 17.09 points weaker at 7,701.15 and the Industrial Index improved 7.7 points to 3,071.24, while the Finance Index shed 9.96 points to 14,278.31.
Of the heavyweights, Maybank added one sen to RM7.86, Sime Darby rose five sen to RM8.18 and IHH Healthcare improved two sen to RM6.40.
TNB eased two sen to RM14.02 and Petronas Chemicals went down seven sen to RM6.81, while Public Bank was flat at RM19.64.
Of the actives, RGB International earned half-a-sen to 24.5 sen, MyEG rose three sen to RM2.30, while AtSystematization Bhd, Sumatec and Versatile were all flat at three sen, 5.5 sen and RM1.40 respectively. — Bernama
Source: Malay Mail
Oil price jumps 9% on Opec production cut deal, global stocks rise
Higher crude prices bolstered shares of energy producers and stock prices around the world, with the Dow and S&P 500 stock indexes touching record highs.
An improving view on global growth, led by the United States on hopes of tax cuts and federal spending under a Trump administration, rekindled the dollar's advance toward a near 14-year peak.
"Everything seems to be coming together for more growth and risk appetite," said Larry Milstein, head of agency and government trading at R.W. Pressprich & Co. in New York.
Gold lost its safe-haven lustre as investor confidence strengthened, posting its worst monthly loss since mid-2013.
The Organization of the Petroleum Exporting Countries has agreed its first output limiting deal in eight years in an effort to deal with a global supply overhang, an OPEC source told Reuters as the debates continued in Vienna on the size of each member's cuts.
Brent crude settled up $4.09, or 8.82 percent, at $50.47 a barrel. U.S. crude settled up $4.21 or 9.31 percent at $49.44.
The rally in energy shares helped lift the Dow and the S&P 500 to record intraday highs before retreating in late trading. The blue-chip U.S. stock indexes were also briefly boosted by bank stocks on bets of loosening of regulation under Trump and a Republican-controlled Congress.
The Dow Jones industrial average <.DJI> ended up 1.98 points, or 0.01 percent, to 19,123.58, the S&P 500 <.SPX> closed down 5.85 points, or 0.27 percent, to 2,198.81 and the Nasdaq Composite <.IXIC> finished down 56.24 points, or 1.05 percent, to 5,323.68.
For November, the Dow gained 5.4 percent, the S&P rose 3.4 percent and the Nasdaq increased 2.6 percent.
European stocks also advanced on a jump in oil companies <.SXEP>. But regional banks struggled after news Royal Bank of Scotland <RBS.L> failed a Bank of England stress test and Italian lenders fell before a referendum on the country's political system on Sunday. [.EU]
Europe's broad FTSEurofirst 300 index <.FTEU3> rose 0.53 percent at 1,350.85, raising its November gain to 0.9 percent.
The MSCI world equity index <.MIWD00000PUS>, which tracks shares in 45 nations, fell 0.50 point or 0.12 percent, to 413.43, reducing its monthly gain to 0.6 percent.
The jump in oil prices, together with stronger-than-expected data on U.S. private job growth and regional manufacturing on Wednesday, ignited a wave of selling in bonds, pushing benchmark U.S. yields toward their highest since July 2015.
An aversion to owning long-dated U.S. government bonds grew after U.S. Treasury nominee Steven Mnuchin told CNBC television: "We'll look at potentially extending maturity of the debt because eventually we're going to have higher interest rates."
U.S. 10-year Treasury note yield <US10YT=RR> rose 9 basis points to 2.39 percent, a tad below last week's 2.42 percent that was the highest since July 2015.
The German 10-year Bund yield was 4 basis points higher at 0.26 percent, while the Japanese 10-year yield edged up 1 basis point at 0.03 percent. <DE10YT=RR> <JP10YT=RR>
Bonds across the world lost about $2 trillion in market value since the Nov. 8 U.S. election before they recovered a bit this week, according to Bank of America Merrill Lynch <.MERGBMI> data.
Rising U.S. yields and upbeat domestic data pushed the dollar index <.DXY> up 0.59 percent at 101.53, which was short of the near 14-year high of 102.05 set last week. It was up about 3 percent for a second month in November.
Meanwhile, gold lost 8.2 percent in November for its biggest monthly decline since June 2013, largely pressured by the bets of a series of U.S. interest rate hikes over the next year as U.S. growth seemed to accelerating.
Spot gold prices <XAU=> fell $16.06 or 1.35 percent, to $1,172.28 an ounce. - Reuters
Source: The Star
How to Fill the Void Left by TPP
Bank Negara wants rules of NDF market to be changed
BY JOSEPH CHIN
Bank Negara Malaysia Governor Datuk Muhammad Ibrahim: "Perhaps it is time to change the rules of the game."
KUALA LUMPUR: Bank Negara Malaysia (BNM) wants a change in the rules for the offshore ringgit non-deliverable forward (NDF) market following the recent weeks of speculative position taking.