Exporters including glovemakers down as ringgit strengthens

Exporters including glovemakers down as ringgit strengthens
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KUALA LUMPUR (Jan 21): Petronas Chemicals Group Bhd, Top Glove Corp Bhd and Supermax Corp Bhd settled lower at Bursa Malaysia’s afternoon break today as a strengthening ringgit against the US dollar led to expectation that export-based companies' US dollar-based revenue will be less in ringgit terms.

At 12:30pm today, Top Glove’s share price fell eight sen or 1.3% to RM6.06, Supermax settled down 10 sen or 1.58% at RM6.21 while Petronas Chemicals dropped 18 sen or 2.39% to RM7.36.

At a glance, these FBM KLCI constituents were among KLCI stocks which had a profound impact on the 30-stock index's trading dynamics earlier today when the gauge fell below 1,600 points.

At midday break, the KLCI settled down 3.37 points or 0.21% at 1,598.17 after rising to its highest so far today at 1,615.22.

In currency markets, the ringgit appreciated to its strongest point against the US dollar so far today at 4.0295 after the exchange rate closed at 4.0435 yesterday.

Today, the exchange rate was between 4.0295 and 4.0430.

The ringgit’s strengthening today was seen to be broad-based against global currencies after Bank Negara Malaysia’s Monetary Policy Committee decided yesterday to maintain the overnight policy rate at 1.75%,

Compared to the Singapore dollar today, the ringgit strengthened to 3.0465 at the time of writing.

Against the euro, the ringgit appreciated to 4.8923.

The ringgit strengthened against a weaker US dollar. It was reported that the US dollar declined versus major peers on Thursday as optimism that the new US administration's massive stimulus package will bolster growth sapped demand for safe-haven currencies.

It was reported that riskier commodity currencies were supported as Asian stocks followed US equities in rising to new records after Joe Biden, who has laid out plans for a US$1.9 trillion pandemic relief package, was sworn in as president.

"Risk sentiment is quite positive right now and we expect it to remain so this year, with growth expected to rebound quite strongly,” Reuters quoted Shinichiro Kadota, senior currency strategist at Barclays Capital in Tokyo, as saying.

Chong Jin Hun