Thursday, August 27, 2015

Ringgit headed for 10th weekly loss before Bersih protests

Ringgit headed for 10th weekly loss before Bersih protests

[KUALA LUMPUR] The ringgit was headed for a 10th weekly decline, its longest losing streak since 2013, as thousands of protesters prepared for a weekend march to demand Prime Minister Najib Razak's resignation.
The ringgit has dropped 25 per cent in the past year, the biggest decline in Asia, as a scandal involving political donations to Mr Najib damps sentiment and a 53 per cent drop in Brent crude prices hurts the finances of the oil-exporting nation. The yield on 10-year government bonds rose to a seven- year high as a plunge in Chinese equities this week deepened concerns about growth in Malaysia's biggest overseas market.
"Overall, sentiment is still very weak," said Choong Yin Pheng, senior manager for bonds and economic research at Hong Leong Bank Bhd. in Kuala Lumpur. "There are still a lot of concerns on the growth outlook as well as some of the domestic issues." The ringgit depreciated 1.1 per cent in the past five days to 4.2273 a dollar as of 10:18 am in Kuala Lumpur, according to prices from local banks compiled by Bloomberg. The currency rose 0.2 per cent Friday and Hong Leong Bank's Choong said gains were supported by a 10 per cent overnight jump in Brent.
"Despite a recovery in oil prices, the ringgit is failing to fully benefit from this as offshore sentiment towards Malaysian assets remains poor," said Khoon Goh, a senior foreign-exchange strategist at Australia & New Zealand Banking Group Ltd in Singapore. "There is perhaps some nervousness ahead of the Bersih 4 rally this weekend, which had been deemed illegal by the authorities."
Police are bracing for thousands of protesters to march through parts of the capital this weekend demanding Najib's resignation after an official probe showed the premier received billions of ringgit in his private accounts in 2013. The Coalition for Clean and Fair Elections, or Bersih, expects about 200,000 people to demonstrate in Kuala Lumpur in its third major protest since Mr Najib came to power in 2009.
Christian de Guzman, a Singapore-based vice-president at Moody's Investors Service, said Thursday clouds are gathering over the positive outlook for Malaysia's A3 rating, the fourth- lowest investment grade.
Sovereign bonds fell this week, with the 10-year yield rising three basis points to 4.42 per cent, according to prices from Bursa Malaysia. It reached 4.45 per cent Wednesday, the highest since 2008.
BLOOMBERG

No comments:

Post a Comment

728 X 90

336 x 280

300 X 250

320 X 100

300 X600