KUALA LUMPUR (Oct 15): Ringgit tracks a decline in Asian currencies as the dollar extends Friday’s gains. Global funds continue to offload Malaysian stocks.
* USD/MYR rises 0.1% to 4.1582
** Support 4.1227, 4.1187, 4.0900; resistance 4.1645, 4.1990, 4.2437
** NOTE: Overseas investors sold $41.8m of Malaysian equities on Oct 12, taking outflows this year to more than $2b
* USD/MYR is expected to rise to 4.20 by year-end and 4.25 by 1Q 2019, Win Thin, global head of currency strategy at Brown Brothers Harriman, wrote in a report received Oct 12
** Global investing environment will probably remain difficult in 4Q, with economic and political uncertainty likely to be high
* 10-year govt bond yield ended steady at 4.14% on Oct 12
* Maybank Kim Eng Securities is neutral on Malaysian govt bonds as a risk of higher supply in FY2019 counters positive technicals for the rest of this year, says Winson Phoon, head of fixed-income research in Singapore
** Supply risks for next year are skewed to the upside due to the govt’s fiscal challenges including a commitment to honor tax refunds
** The federal budget to be unveiled on Nov 2 is next key event on investors’ radar
* Govt sold RM3b of 20-year bonds at average 4.759% yield at auction Friday; bid-to-cover was 1.66 times, lowest since April
** Sale attracted limited demand as investors are concerned about govt’s debt levels and fiscal consolidation efforts: DBS Bank
* Countries that are faced with large cross-border flows should be allowed to use measures to manage the movement of capital, BNM Governor Nor Shamsiah Mohd Yunus said Saturday
* Anwar Ibrahim won a district by-election on Saturday, paving the way for the formerly jailed leader to become Malaysia’s next PM