US Fed rate hike unlikely next month


KUALA LUMPUR: Malaysian shares ended little changed Thursday.

This was largely due to caution ahead of earnings announcements from index heavyweights and the lower likelihood of a US Federal Reserve rate hike next month, according to the Nikkei Asian Review.

The benchmark FTSE Bursa Malaysia KLCI edged 0.03 per cent higher to 1,694.87 points. The index, up by 0.6 per cent this week, is on course for its third weekly advance. For the month, it is up by 2.5 per cent.

The ringgit rose 0.4 per cent to 3.9925 to a dollar.

“The July Fed minutes did not really provide any new insights to the Fed’s monetary policy direction but we still expect one 25 basis points hike in December and continue to think it is unlikely the Fed will hike in the near term (September),” Alvin Liew, economist at UOB, said in a note.

The July Fed minutes, released Wednesday, revealed that officials remained divided over the timing of the next interest rate hike, said the Nikkei report.

The report said the minutes showed that “members judged it appropriate to continue to leave their options open and maintain the flexibility to adjust the stance of policy based on incoming information”.

The remaining Fed meetings for this year are scheduled for Sept 20-21,Nov 1-2 and Dec 13-14.

On the KLCI, 12 of the 30 constituents ended higher Thursday and 10 closed unchanged, while overall declining issues outnumbered advancing ones 439 to 384.

Foreign investors purchased RM156.9 million of Malaysian shares on Wednesday, according to MIDF Research. So far this year, about RM2.2 billion in foreign funds has entered the country’s equity markets.

Kuala Lumpur Kepong rose 0.6 per cent to RM23.36, Astro advanced 1.0 per cent to RM2.92 and SapuraKencana Petroleum rose 1.3 per cent to RM1.58.

MISC fell 0.8 per cent to RM7.53, CIMB fell 0.4 per cent to RM4.73 and Axiata declined 0.5 per cent to RM5.87.