Friday, October 25, 2013

Bursa closes at new high, again


Publication: NST
Date of publication: Oct 25, 2013
Section heading: Business Times
Page number: 001
Byline / Author: By Roziana Hamsawi

KUALA LUMPUR: The stock market closed at an all time high for the second consecutive day yesterday, reflecting optimism over today's 2014 Budget announcement.

The FTSE Bursa Malaysia KLCI (FBM KLCI) closed 4.82 points higher at 1,818.93, beating Wednesday's close of 1,814.11.

Analysts said investors are expecting measures that will spur growth as the government addresses deficit concerns to prevent another rating downgrade.

They said institutional investors have been buying into Malaysian heavy weights since the general election because of the fairly stable economic growth.

Meanwhile, Bloomberg reports that Malaysia's 10-year bond yields dropped the most since June.

The yield on the 3.48 per cent bonds due in 2023 declined 11 basis points to 3.62 per cent, the lowest since July 8, according to data compiled by Bloomberg.

It said the ringgit strengthened for a second day on speculation that Prime Minister Datuk Seri Najib Razak will stand by a pledge to further cut subsidies, broaden the tax base and possibly announce a new government services tax.

Malaysia will probably implement an initial four per cent goods and services tax (GST) that will generate RM20.5 billion, or as much as 14 per cent of total tax revenue in the first year, according to an October 16 report from DBS Group Holdings Ltd.

"The market is expecting Najib to announce further measures to cut the fiscal deficit," said Wong Chee Seng, a currency strategist at AmBank Group, here.

"This is the main driver for the ringgit's strength," he added.

Nomura Singapore Ltd forex analyst Wee Choon Teo told Bloomberg that any action to rationalise subsidies and implement GST will be taken positively by the market.

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