MY CLOSING BELL REVIEWS | LACK OF SUPPORT, KLCI DROP BELOW 1450

The vast majority of Asian stock markets showed an upward trend, but the Malaysian stock market did not seem to find support and was unable to stand at 1,450 points.

As of closing at 5 p.m., the FTSE Composite Index closed at 1449.58, down 3.96 points, or 0.27%.

The full-day trading volume was 2.9 billion shares, with a transaction value of RM2.2 billion.

The FTSE Malaysia All Stock Index closed at 10,700.46 points, down 5.55 points.

There were 530 rising stocks, 342 falling stocks, 457 had no ups or downs, and 1005 had no transactions.

Also, as of 5 p.m., the ringgit was at the level of 4.6812 to 1 US dollar.

Fitch Solutions' BMI predicts that Bank of China will maintain an overnight policy interest rate (OPR) of 3.0% until the end of 2024.

According to BMI, China's overall inflation rate fell from 2.8% in May to 2% in July. The improvement in inflation means that Malaysia's actual policy interest rate is currently at a positive value, which is also in line with the trend of ending the austerity cycle.

“We believe that current interest rates are sufficient to control inflation, and the central bank will remain on hold.”

The slowdown in inflation was higher than expected, and the BMI also revised the inflation rate forecast for the end of 2023 from 2% to 1.8%, and the average inflation rate was also lowered from 2.7% to 2.6%.

The BMI forecast is also putting pressure on the ringgit. So far this year, the ringgit has depreciated 5.9% against the US dollar, making it one of the worst performing currencies in the region.

Therefore, BMI said that in an environment where global monetary conditions are still tight, a quick resumption of monetary easing will increase the downward pressure on the ringgit. If the ringgit faces heavy depreciation pressure, the Bank of China may be forced to raise overnight policy interest rates in order to maintain interest spreads with the US.

As for the possibility of cutting interest rates, the agency believes that the Bank of China does not need to cut interest rates too soon. Compared with its peers in the region, the Bank of China's cumulative interest rate hike of 125 basis points is relatively small.

“We believe that in the face of a weak economy, the current underlying effects are still beneficial, and potential price pressure will ease somewhat.”

At a time when China's economy is weak this year, the agency believes that the Bank of China will not be too impatient in dealing with the economic slowdown.

The Bank of China had earlier predicted that the recovery of the electrical and electronics industry would be stronger than expected, which bodes well for the economy.

BMI said, “If it continues, the rebound in the Malaysian export-led economy will ease the pressure on the Bank of China to cut interest rates.”

Deputy Minister of Finance Dato' Sri Ammaslan stated that the issue of slow industrial sales will be brought to the budget team to discuss solutions to this matter.

After introducing the National Institute of Industrial Evaluation's industry report for the second half of the year today, he said at a press conference that the problem of slow sales in the industry has always existed. Although improvements have been made, he still hopes to resolve this issue as soon as possible.

“I'll tell them (the budget team) about most of the slow-selling houses being sold for RM500,000 or more... but I can't promise anything right now.”

As the market gradually recovered, the slow sales situation in the industry improved. Compared with the second half of last year, industrial slow-selling units fell by 5.3% and 0.6% in the first half of this year to 26,286, with a total value of RM18.3 billion.

Industrial slow sales in Jozhou were the highest in the country, reaching 59.4%, equivalent to 13,366 units; followed by Kuala Lumpur and Xuzhou, with 24.2% (5,450 units) and 12.0% (2,689 units), respectively.

This joint venture was co-founded by Zhengyang Medical, a subsidiary of Zhengyang Group, and Icon Group, and named Icon Zhengyang Company.

Zhengyang Medical will hold 30% of the shares in the joint venture, and the remaining 70% will be held by Icon Group; at the same time, the two parties will invest RM6 million according to the shareholding ratio.

The two sides will cooperate to improve the efficacy of cancer treatment and promote the development of clinical specialties in cancer care to improve the level of cancer care in Malaysia.

Analysts pointed out that the total rental rate of the retail store business at Malaysia Airport in the first half of the year was only 67%. At the same time, it also gave a 33% rent discount to tenants that had not reopened. As for tenants who had already reopened, given that passenger traffic had not yet returned to pre-epidemic levels at the time, analysts expected Malaysia Airport to also give a 30% discount.

Most importantly, Malaysia's airport only collected 47% of rental income in the first half of the year.

However, in the second half of the year, Malaysia Airport expects all stores to reopen at the end of this year, which means that rent relief or discounts will no longer be offered next year. In this regard, analysts expect rental and commercial revenue to increase by 39.5% to RM782 million next year.

The profit forecast for next year is even 14% higher than the previous level due to Malaysia Airport's restructuring plan in the retail business and raising basic rents.

Looking back at history, XOX said that in May 2022, Telecom proposed a strategic technology partnership with Ipoh City Hall to enhance Ipoh City Hall's existing infrastructure and services through digitalization, virtual reality applications, cashless and automation.

However, in May of this year, the two sides agreed to extend the MOU for 12 months to finalize the strategic technology partnership arrangement.

XOX said in its filing with the Malaysia Exchange today that the new memorandum of understanding will replace and extend the agreement signed between the company and Ipoh City Hall in May 2022.