Cautious market sentiment to persist, says HLIB Research

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KUALA LUMPUR (April 28): Hong Leong IB Research (HLIB Research) expects the cautious market sentiment to persist with the looming deadline (May 2) for International Petroleum Investment Co (IPIC) to honour the US$50 million (about RM196 million) interest payment.

In a strategy note today, the research house said it also understood that there is another interest payment of US$52.4 million (about RM205 million) due on May 11 on a separate 1Malaysia Development Bhd bond (also guaranteed by IPIC).

HLIB Research said it was positive on the appointment of Datuk Muhammad Ibrahim as Bank Negara Malaysia (BNM) governor as it will ensure continuity of BNM policies, with ultimate objective to achieve medium-term sustainable growth with price stability.

The research house said it continues to expect BNM to keep the overnight policy rate steady at 3.25% throughout 2016.

"Strong advocate of financial stability is expected, with measures on the property sector and responsible lending guidelines to be upheld during Muhammad Ibrahim's stewardship.

"With the appointment of internal successor, we also expect speculation of potential relaxation of property measures to fizzle out," it said.