KLCI down on Trump impeachment call; ringgit braces for FTSE Russell verdict

KLCI down on Trump impeachment call; ringgit braces for FTSE Russell verdict
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KUALA LUMPUR (Sept 25): The FBM KLCI closed 2.75 points on 0.17% lower today at 1,589.58 with Asian stock markets following the overnight decline in US equities after US lawmakers called for an impeachment inquiry into President Donald Trump.  

In currency markets, the ringgit weakened today ahead of FTSE Russell’s decision tomorrow (Sept 26) on whether to exclude Malaysia bonds from its World Government Bond Index (WGBI).

In the US, Reuters reported that the dramatic move by Democrats in the House of Representatives compounded investors' anxieties with confidence already shaken by US-China trade tensions and global recession risks.

Speaking to theedgemarkets.com today, Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew characterised today’s KLCI movements as “sluggish”.

“We are just following the queue from New York, it is a knee jerk reaction to declines [seen in US indexes], so local factors are not at play,” he said.

Across Bursa Malaysia today, 2.19 billion shares worth RM1.62 billion were traded. Top decliners included Aeon Credit Services (M) Bhd and Hong Leong Bank Bhd.

The top-active stock was newly listed MTAG Group Bhd, which registered a volume of some 288 million shares. MTAG share's price closed down nine sen or 17% at 44 sen against its initial public offering price of 53 sen each.

Globally, Reuters reported that Asian stocks fell the most in three weeks on Wednesday after US lawmakers called for an impeachment inquiry into Trump, increasing the prospects of prolonged political uncertainty in the world's largest economy.

It was reported that MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.86%, the biggest decline since Sept 3.

Tomorrow, a key risk event to watch out for is FTSE Russell’s decision whether to exclude Malaysia bonds from its WGBI.

UOB Global Economics and Markets Research said in its latest quarterly global outlook report that FTSE Russell’s decision this month on the status of Malaysian bonds in the WGBI is a key risk for the ringgit.

At the time of writing today, the ringgit weakened to 4.1915 against the US dollar. The ringgit was traded earlier today at between 4.1733 and 4.1940 versus the US dollar.