Malaysia’s CPI up 3.9%
Source: The Star
Malaysian bank credit profiles stable amid growing challenges
PETALING JAYA: A combination of slower growth and higher leverage in Malaysia increases credit risks for the country’s banks, S&P Global Rating said.
“Malaysia’s economic expansion shifted to a lower gear two years ago, and the momentum has not returned. A weak energy sector, subdued global demand, and tightened domestic spending continue to drag on growth,” said S&P Global Ratings credit analyst Rujun Duan.
Meanwhile, however, corporate and household indebtedness has been steadily rising in an environment of low interest rates and easing credit conditions.
“In 2016, the Malaysian banks we rate reported weak earnings growth, and we expect their full year profitability to remain sluggish in 2017,
“A weakening bank earnings trend comes on the back of slower loan growth, tight margins, and weakening asset quality in a few areas, such as commodities-related overseas loan portfolios and household credit.
“In addition, banks face potential risks due to their exposure to industries with structural or cyclical difficulties, such as commercial real estate and automobiles.
“Heightened leverage in households and the corporate sector, low commodity prices, and oversupply in commercial property add to asset-quality
vulnerabilities,” she said.
The international rating agency said in its view, however, a number of counterbalancing factors support Malaysian banks credit profile.
Industry-wide impaired loan ratios are hovering around a historical low of 1.6%. Capital and liquidity buffers are more than ample to absorb increased stresses.
Separately, it believe prudential measures implemented by the regulators and tighter underwriting standards enforced by banks will also help to keep credit risks at bay.
Heightened volatility in the Malaysia’s exchange rate has a limited direct impact on the country’s banks. This is because ringgit assets make up the bulk of bank balance sheets in Malaysia, and foreign currency liabilities are well matched by foreign currency assets.
Prudent oversight from the regulator also helps to mitigate the relevant risks, S&P Global noted.
Despite the clear merits of a more consolidated banking sector for Malaysia, the research agency said a number of stumbling blocks could make consolidation a protracted process, especially in a slowing growth environment. Obstacles include difficulties in extracting synergies from deals, or agreeing on retrenchments and restructuring.
Source: The Star
Ringgit marginally higher at opening
KUALA LUMPUR, June 13 — The ringgit opened marginally higher this morning on higher interest for the local currency, a dealer said.
At 9am, the local unit was quoted at 4.2630/2670 against the greenback from last Friday's 4.2635/2665.
FXTM Research Analyst Lukman Otunuga said caution still lingered in the air as traders were alert of macroeconomic events that could spark extreme volatility in the market.
“With political uncertainty in the United States and soft economic data weighing heavily on the US dollar, the outlook remains tilted to the downside,” he said.
Lukman noted that investors were still questioning US President Donald Trump's impeachable offence by sharing classified information with Russia and attempting to interfere with US-Russia relations.
Against a basket of major currencies, the ringgit was traded lower except against the British pound.
It slipped marginally against the Singapore dollar to 3.0798/0838 from 3.0795/0827 and depreciated versus the yen to 3.8755/8805 from 3.8615/8653 last Friday.
The local unit edged up to 5.3987/4042 from 5.4291/4351 compared with the British pound and declined against the euro to 4.7716/7769 from 4.7628/7674 last Friday.
The foreign exchange market was closed yesterday for the Nuzul Al-Quran public holiday. — Bernama
Source: Malay Mail
Malaysia’s exports still grow at a robust pace
Expansion due to strong E&E demand, higher commodity prices
Ringgit firmer vs US$, pound sterling early Monday
KUALA LUMPUR: The ringgit extended last week's gains to open higher against the US dollar on MOnday, prompted by continued buying support in the emerging currencies, including the local note, a dealer said.
At 9.10 am, the local unit was quoted at 4.2670/2710 against the greenback from Friday''s close of 4.2790/2820.
Against a basket of major currencies, the ringgit traded mostly lower.
It slightly weakened against the Singapore dollar to 3.0878/0918 from 3.0873/0901 on Friday and depreciated against the yen to 3.8622/8669 from 3.8380/8417.
The local unit strengthened against the British pound to 5.4899/4968 from 5.5062/5105 last week but went down against the euro to 4.8102/8151 from 4.8015/8053. - Bernama
Soruce: The Star