Inve$t | Market Sentiments | 7 July 2023
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Bank Negara Malaysia’s (BNM) Monetary Policy Committee (MPC) has maintained the Overnight Policy Rate (OPR) at 3%. In a statement, BNM said that at the current OPR level, the monetary policy stance is slightly accommodative and remains supportive of the economy. The MPC continues to see limited risks of future financial imbalances but remains vigilant to ongoing developments and will continue to monitor incoming data to inform the assessment on the outlook of domestic inflation and growth. The MPC will ensure that the monetary policy stance remains conducive to sustainable economic growth amid price stability.
The central bank added that the global economy continues to expand, driven by resilient domestic demand supported by strong labour market conditions. Global economic growth, however, remains weighed down by persistent core inflation and higher interest rates. While China’s reopening remains supportive of the global economy, its pace of recovery has slowed in recent months.
Globally, headline inflation continues to moderate, but core inflation remains above historical averages. For most central banks, the monetary policy stance is likely to remain tight. The growth outlook remains subject to downside risks, mainly from a slower momentum in major economies, higher-than-anticipated inflation outturns, an escalation of geopolitical tensions, and a sharp tightening in financial market conditions.
Following a strong outturn in the first quarter of the year, the Malaysian economy expanded at a more moderate pace in recent months as exports were weighed down by slower external demand, as expected. Growth for the remainder of the year will continue to be driven by resilient domestic demand.
Household spending continues to be underpinned by favourable labour market conditions, particularly in the domestic-oriented sectors. Tourist arrivals have been steadily improving, and are expected to continue rising, thereby lifting tourism-related activities.
Investment activity will be supported by continued progress of multi-year infrastructure projects. Domestic financial conditions also remain conducive to financial intermediation amid sustained credit growth. While the growth outlook is subject to some downside risks stemming from weaker-than expected global growth, upside risks mainly emanate from domestic factors such as stronger-than-expected tourism activity and faster implementation of projects.
The headline inflation has continued to ease amid lower cost factors. While core inflation has also moderated, it remains elevated relative to the long-term average amid lingering demand and cost factors.
For the second half of 2023, both headline and core inflation are projected to trend lower, broadly within expectations. Risks to the inflation outlook remain highly subject to the degree of persistence in core inflation, changes to domestic policy on subsidies and price controls, as well as global commodity prices and financial market developments.
Bursa Malaysia becomes sole point of reference for investor relations matters following MIRA discontinuation
According to Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift, the exchange has assumed the role of Malaysian Investor Relations Association (MIRA), following the discontinuation of the association on July 1. Bursa will serve as the single point of reference for investor relations (IR) matters to prevent redundancy and duplication of functions.
Mira was established in 2007 by Bursa Malaysia to develop and enhance IR capabilities of public listed companies (PLCs) through effective communication and the cultivation of stronger relationships between PLCs and the investor community.
Investor relations practitioners or professionals in Bursa Malaysia PLCs, including former MIRA members, can expect further capacity building support and guidance from the exchange to enhance their skills and knowledge. Bursa Malaysia is pleased to assume the role previously held by MIRA and looks forward to expanding its efforts in advancing PLCs’ investor relations capabilities and proactiveness, to raise the PLCs’ stature and appeal to investors globally.
Investor relations is a strategic function, to importantly communicate in a credible and engaging manner on the company’s performance and growth plans. The exchange is committed to continue providing PLCs and IR practitioners with the necessary knowledge, training or workshops and other essential resources to effectively engage with their shareholders and wider stakeholders.
Bursa Malaysia has been spearheading several initiatives to enhance PLCs’ visibility and accessibility to the investment community through more active investor relations engagements. Such notable initiatives to elevate best practices from an IR standpoint include the PLC Transformation Programme, specifically through Guidebook 3 entitled Strengthening Stakeholder Management & Investor Relations, as well as the Investor Relations and Public Relations Incentive Programme.
Eye On The Markets
On Thursday (06July), the Ringgit closed at 4.6630 against the USD and 3.4493 to the Sing Dollar. On Monday (03July), the FBM KLCI opened at 1379.39. As at Friday (07July) 9:00am, the FBM KLCI is down 2.81 points for the week at 1382.20. Over in US, the overnight Dow Jones Industrial Average closed down 366.38 points (-1.07%) to 33,922.26 whilst the NASDAQ shed 112.61 points (-0.82%) to 13,679.04.