Current OPR is at 3%. With major central banks around the world embarking on synchronized normalisation of interest rates given the synchronized growth in global economy, our local bank has to hike to maintain the interest differential.
MFRS 9 is not the main factor why banks are competing so aggresively for deposits. It is the LCR and NSFR that they need to comply with, to maintain the regulatory expectations in regards to liquidity and funding structure. Moreover, there will be added capital buffer requirements in the form of capital conservation and countercylical capital buffer that the banks need to provide in their capital ratios.
Fabien Extr. That was what I thought that the OPR is 3% and not 6%. BTW, do you see Malaysia OPR going up this year and if so to what level. Thank you in advance.
How about comparing with other ASEAN countries like Philipines, Vietnam etc? Their interest rates are not low like US or Japan, but their stock performance in 2017 were much better than Bursa. Thus, I think the relatively lower stock performance in Bursa is not solely due to our interest rate.
Value88, true. It's one of the factors, but I consider it the main one.
For asean countries, if I have to venture a guess, it's because their countries are far less developed and so double digit growth on companies is more common.
Also their stock markets are alot newer than ours. When the Malaysian stock market first started, people were truly gambling in the market and frying everything up to the sky. MUIIND was worth more than RM20. While it's only 20 sen now.
Cambodia's stock market got less than 20 companies. I imagine Vietnam's is not that much bigger.
Thanks Jon. Another factor causing Bursa's under-performance in 2H 2017 was probably due to coming election which raises the uncertainty level. Market does not like uncertainty.
The GREECE stock market index (1) 1999 Index peaked at 6500 (2) 2003 Index bottomed at 1500 (3) 2008 Index peaked at 5400 (4) Today, 2018, the Index is at 727 (a drop of 86% from its peak)!!!
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Posted by Fabien Extraordinaire > 2018-01-21 10:39 | Report Abuse
Current OPR is at 3%. With major central banks around the world embarking on synchronized normalisation of interest rates given the synchronized growth in global economy, our local bank has to hike to maintain the interest differential.
MFRS 9 is not the main factor why banks are competing so aggresively for deposits. It is the LCR and NSFR that they need to comply with, to maintain the regulatory expectations in regards to liquidity and funding structure. Moreover, there will be added capital buffer requirements in the form of capital conservation and countercylical capital buffer that the banks need to provide in their capital ratios.