MY Closing Bell Reviews | REGIONAL SLUMP, KLCI DROP 1.62 POINTS

The Middle East conflict continues to escalate, global funds further withdraw from the Chinese stock market, and Asian stocks fell all day.

At the close of 5 p.m., the composite index closed at 1441.04 points, a slight decrease of 1.62 points or 0.11%.

The total trading volume for the day was 3.5 billion shares, with a trading value of 1.9 billion ringgit.

There are 315 rising stocks, 558 falling stocks, 464 stocks with no movement, and 1,020 stocks with no trading.

At 5:1 USD cashed out ringgit, at a level of 4.7675.

The central bank announced that as of October 13, our country's foreign reserves reached 108.9 billion US dollars (approximately 518.3 billion ringgit), a decrease of 1.2 billion US dollars (approximately 5.6 billion ringgit) compared to the end of September.

According to a statement released by the central bank on Friday, Malaysia's current foreign exchange reserves are sufficient to cover 5.1 months of imports of goods and services, as well as 1.0 times of short-term external debt.

In late September, our forex reserves reported $110.1 billion (equivalent to about 519.2 billion ringgit at the time).

Amid disappointing latest export data and widening interest rate differentials between Malaysia and the USA, the ringgit once dipped to 3.4826 against 1 Singapore dollar in today's trading, hitting a historic low.

Nevertheless, the ringgit later recovered slightly. As of 5:40 pm, the exchange rate of 1 Singapore dollar to the ringgit was 3.4747 ringgit, depreciating by 0.08%.

Bloomberg reported that the ringgit weakened to a historic low against the Singapore dollar due to Singapore previously raising exchange rates to support its currency, while Malaysia's central bank kept the overnight policy rate (OPR) unchanged at a meeting in July.

Bloomberg pointed out that the interest rate differential between Malaysia and the United States has reached a historical high compared to the top of the US benchmark interest rate.

Simultaneously, Malaysia's export data has been declining for 7 consecutive months, with a year-on-year drop of 13.7% in September, also impacting the ringgit. Bloomberg noted that part of the reason for the weakening exports is the economic slowdown in Malaysia's largest trading partner - China.

In addition, Bloomberg reported that since October, foreign funds worth $0.324 billion (approximately 1.540 billion ringgit) have been withdrawn from the Malaysian stock market, marking the first outflow in the past four months, damaging market sentiment.

At the same time, there has been a continuous outflow of foreign funds from Malaysia's bond market for the past two months.

On Thursday morning, the exchange rate of the Ringgit against the US Dollar hit a 25-year low since the Asian financial crisis; fortunately, the Ringgit stabilized in the afternoon, reporting 4.7677 Ringgit to 1 USD by 5:40 pm, a slight appreciation of 0.04% compared to yesterday's 4.7695 Ringgit.

Malaysia's exports in September fell by 13.7% year-on-year, marking the fourth consecutive month of double-digit decline. However, economists remain optimistic that the downward trend in Malaysian exports is approaching an end, with an estimated rebound in the first quarter of 2024 at the earliest.

In a report released today, analysts from AllianceDBS Research economists pointed out that while it may be challenging for Malaysian exports to turn from negative to positive within this year, the decline is expected to gradually narrow to single digits.

This is mainly due to the dissipation of the high base effect and the support of stable demand from China.

With improvements in the consumer and industrial sectors, China's recent economic data has also performed well. As China is Malaysia's largest trading partner, China's economic recovery will undoubtedly boost Malaysia's export performance.

As of September this year, China accounts for 13.4% of Malaysia's total exports.

The World Trade Organization (WTO) has also reiterated its positive outlook on global trade growth, with the organization predicting that global trade is expected to grow by 3.3% annually by 2024, and believes that economic growth will tend to stabilize.

At the same time, economists at CIMB research also agree with the above statement and believe that Malaysia's trade data will improve in the last quarter of this year.

The slowdown in the growth rate of food and hotel prices further slows down Malaysia's inflation growth rate to 1.9% in September, lower than the 2% level in August.

According to the latest data from the Statistics Bureau, the inflation rate for food and non-alcoholic beverages in September has slowed down from 4.1% in August to 3.9%; the cost of restaurants and hotels has also decreased from 4.7% to 4.4%.

As for core inflation, it grew by 2.5% annually in September, the same as in August.

The main drivers of inflation growth are annual increases of 2.5% for groceries and service fees, 2.2% for medical expenses, 2.0% for education fees, 1.6% for housing, water, electricity, gas, and other fuels, and 1.5% for furniture, household equipment, and daily maintenance.

On the other hand, the growth rate of home cooking costs in the food and non-alcoholic beverages sub-component slowed to 2.5%, mainly due to rice, bread and other cereals rising by 4.1% annually (4% in August), meat increasing by 3.4% annually (5.8% in August), and dairy, cheese, and eggs rising by 3.4% annually (4% in August).

Although the inflation rate in September has been below the 2% level, analysts believe that due to the depreciation of the ringgit, there is still a risk of rising food prices in the second half of the year.

In the latest report, MIDF Investment Research pointed out that Malaysia's inflation rate in September increased by 1.9% year-on-year, the lowest level since March 2021.

Looking at the first nine months of this year, the average inflation rate for food increased by 5.5% annually, compared to 5.7% in the same period last year.

Analysts believe that amidst challenging global agricultural output, the food inflation rate in the second half of the year is expected to range between 5.5% and 6.0%.

"In addition, the long-term depreciation of the ringgit's exchange rate will lead to an increase in import inflation, especially reflecting on food prices, as our country is a net importer of most food."

First-quarter revenue reported 22.36 million ringgit, a 15.60% year-on-year increase.

The increase in net profit is mainly due to the contribution of three industrial sectors and high leasing in retail. Retail and industrial sectors account for 94.3% and 5.7% of revenue, respectively.

In the retail sector, Southern Malaysia makes the largest contribution, with three malls contributing nearly half of the revenue, while the three malls in Central Malaysia contribute 6.2 million ringgit in revenue, accounting for 29.3% of total revenue, with the remaining revenue contributed by industries in Northern Malaysia.

CEO Wong Pei Shan stated that the leasing rate of most KIP malls exceeds 90%, indicating that KIP Trust has the ability to attract various tenants and customers.

The company filed with Bursa Malaysia on Friday, stating that its wholly-owned subsidiary, Mestron Engineering Sdn Bhd, acquired the equipment and material procurement work related to this large-scale solar project from Fabulous Sunview Sdn Bhd.

This includes the purchase of photovoltaic modules, installation structures, medium-voltage power inverters, monitoring and data acquisition systems (SCADA), wiring, lightning protection, and other basic equipment to form a complete system.

In addition, the company also needs to manage logistics, perform equipment testing, ensure equipment maintenance and safety during the project, and carry out equipment installation.