KUALA LUMPUR (Feb 14): Financial stocks saw increased trading ahead of the Monetary Policy Committee (MPC) meeting on Jan 20 on anticipation of a possible hike in the overnight policy rate (OPR), said Bursa Malaysia.
“Leading up to the first MPC meeting [of 2022], the Bursa Malaysia Financial Services Index (KLFIN) had been inching up week-on-week since the beginning of December 2021.
“Most notably, the index climbed 2.8% for the week ended Jan 14, 2022 as the MPC meeting drew closer, compared to 0.9% for the week ended Jan 7, 2022,” the exchange said in a report on the Bursa Digital Research portal on Monday (Feb 14).
At the MPC meeting, Bank Negara Malaysia however decided to maintain the OPR at 1.75%.
The report noted that foreign investors were net buyers of KLFIN with an inflow of RM486.05 million as of Jan 25.
“Meanwhile, local retailers and local institutions sold RM252.37 million and RM215.08 million respectively,” said Bursa.
The report noted that trading volume and value spiked ahead of the MPC meeting with the highest volume recorded on Jan 10 at 818.81 million and the highest value on Jan 11 at RM648.4 million.
For the week ended Jan 14, Public Bank Bhd, Malayan Banking Bhd (Maybank) and CIMB Group Holdings Bhd were the financial stocks that saw the highest foreign inflow at RM102.36 million, RM67.48 million and RM50.35 million, respectively.
Maybank and CIMB saw their share prices gaining 1.68% and 1.47%, respectively, during the week.
According to Bursa, most economists expect a tightening of the monetary policy to maintain price stability in view of inflationary pressures.
“Based on Bloomberg’s economist poll from 22 respondents, 50% of them expect one rate hike while 36% expect two rate hikes this year.
“52% of the economists expect the rate hike to happen in the third quarter and 64% expect a rate hike in the fourth quarter,” the exchange said.
“Investors are expected to be looking out for more clues on MPC’s OPR decision in its upcoming monetary policy meeting in early March,” it added.