− Other investment (RM9.8b; 4Q23: -RM15.5b): reversed to a net inflow, driven by loan repayments and settlement of trade credits by resident corporates, resulting in a net inflows in both assets (RM9.6b) and liabilities (RM0.2b).
− Portfolio investment (-RM23.7b; 4Q23: -RM6.0b): despite continued inflows of non-resident investment in the domestic equity market (RM5.3b; 4Q23: RM4.5b), outflows almost quadrupled, primarily due to resident investments in foreign equity (-RM11.8b; 4Q23:RM2.4b) and debt (-RM9.4b; 4Q23: -RM12.3b) securities.
− Direct investment (-RM6.0b; 4Q23: RM5.2b): shifted to a net outflow as direct investment abroad (-RM26.0b; 4Q23: -RM5.5b) exceeded foreign direct investment inflows (RM20.0b; 4Q23: RM10.7b).
● 2024 CA forecast revised higher to 2.7% from 2.3% of GDP (2023: 1.2%), underpinned by a potential resurgence in exports, an upsurge in tourism and repatriation of foreign investment income
− The anticipated surge in exports, buoyed by the global technology boom in 2H24, along with the revitalisation of tourism, propelled by the government's initiatives and the nation's diverse attractions, is poised to significantly bolster the CA surplus in 2024. Furthermore, government policies aimed at attracting investment, coupled with the increasingly promising prospects of the domestic capital market, and efforts to encourage repatriation of foreign income by GLCs and GLICs, have the potential to significantly augment foreign inflows, further supporting the CA surplus.
− USDMYR year-end forecast (4.42; 2023: 4.59): Signs of weakness in the US economy, including subdued labour demand, sluggish wage growth, and an increase in corporate bankruptcies, suggests that vulnerable sectors are struggling with elevated interest rates. We anticipate further economic softening and the potential easing of inflationary pressures in the coming months, maintaining our outlook for a Fed rate cut as early as September. Meanwhile, the government's commitment to fiscal discipline may boost investor confidence, stimulate capital inflows, and potentially strengthen the ringgit to around 4.42/USD by the end of 2024.
− Bank Negara Malaysia (BNM) policy rate: Despite global economic uncertainty stemming from geopolitical risks and mixed central bank monetary policies, the Malaysian economy is anticipated to persistently thrive on resilient domestic expenditure and a favourable upswing in exports. This, combined with stable demand conditions and contained cost pressures, may likely allow the BNM to maintain its holding pattern throughout 2024, keeping the overnight policy rate steady at 3.00%.
Source: Kenanga Research - 20 May 2024
Created by kiasutrader | Jul 02, 2024
Created by kiasutrader | Jul 02, 2024
Created by kiasutrader | Jul 01, 2024
Created by kiasutrader | Jul 01, 2024